The Dean of the University of Cape Coast Business School, Professor John Gatsi, has described as “draconian” the Debt Exchange Programme rolled out by government.
Prof Gatsi said the Programme will do more harm than good.
He was reacting to the launch of the Programme on Monday, December 5 as earlier announced by the Minister of Finance, Kenneth Nana Yaw Kuntunkunuku Ofori-Atta, in a nationwide broadcast on Sunday evening.
Under the Programme, domestic bondholders will be asked to exchange their instruments for new ones.
Existing domestic bonds as of Thursday, December 1 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
The annual coupon on all of those bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity with coupon payments done semiannually.
But speaking on Ghana Tonight on TV3 on Monday, Prof Gatsi said the rollout of the Programme is an admission of failure on the part of government in managing the economy.
“If the Finance Minister is saying because of that we need to do something, then that is an admission of failure,” the economist noted.
“We voted them to power to solve this problem and this problem has not been solved and that is failure on the part of government and to use this draconian approach to deal with this issue, I am sure it will do more harm than good.”
He suggested that a lot of engagement should have gone into the Programme before its launch.
For him, the new policy should mean that the 2023 budget must be recalibrated other than that it will create problems rather than solving them.