Founding President of IMANI Africa, Mr Franklin Cudjoe has said that the government deserves no praise for paying billions of cedis of coupons to bondholders.
He argues that the government-supervised debt exchange programme occasioned the suspension of coupon payments with most debts restructured amidst wicked financial haircuts.
President Nana Addo Dankwa Akufo-Addo had said in his State of the Nation address on Tuesday Febraury 27 that “a year ago, I also stated the decision to undertake a comprehensive debt restructuring of our domestic and external debt to ensure we remain resolute in our objective to restore macroeconomic stability and sustainable growth.
The decision was not an easy one, considering the complex and diverse domestic debt landscape. We had to consider safeguarding the financial sector, preserving social and economic conditions, and protecting our domestic debt market.
“A year on, I am happy to inform you, Mr. Speaker, that we have made significant progress.
We requested an unprecedented number of bondholders to participate in a voluntary exchange, and we were able to exchange successfully some two hundred and three billion cedis (GH¢203 billion) worth of bonds. Not only was the exchange successful, but it helped us to secure, within five (5) months, the shortest possible time in recent debt restructuring history, a Staff Level Agreement to an Executive Board Agreement with the IMF. My gratitude goes to all financial sector players, organised labour, firms, regulatory institutions, and all individuals who made this painful exercise
successful.
“Mr. Speaker, as you may recall, Government successfully paid the first coupon of two-point-three billion cedis (GH¢2,369.67 million) on the new bonds on 22nd August 2023. At the time, that was the single biggest payout of domestic payments in a single day for Ghana. We, then paid two billion and sixty million cedis (GH¢2,060.72 million) for the last leg of the domestic debt exchange on 5th September 2023. A week ago, last Tuesday, on 20th February 2024, the second coupon of five-point-eight billion cedis (GH¢5,847.72 million) was paid to domestic bondholders. This is the largest coupon paid in a day in Ghana’s history. On the external debt side, we achieved a significant milestone by reaching
an agreement with our public creditors, and I will use this occasion to express our appreciation to the Republic of France and the People’s Republic of China, co-Chairs of the Official Creditors Committee, for their positive roles in this achievement.
“We have also intensified our engagement with our external bondholders on the principles of transparency, fair treatment, consistency with the IMF debt sustainability analysis, and good faith. We are focused and committed to accelerating the process. Mr. Speaker, we are committed to concluding the external debt restructuring process as soon as possible, so we move past the crisis. This will enable us to complete substantially projects that have been
constrained due to financial challenges. In the meantime, some of the priority projects have been transferred onto the GOG budget within the same fiscal space to ensure their completion.”
But in a statement, Mr Cujeo said “The president and his government deserve no praise in both scenarios. The government supervised debt exchange program occasioned the suspension of coupon payments with most debts restructured amidst wicked financial haircuts.
“If you deliberately kill your mother and later make a billion dollar contribution towards her funeral, you don’t deserve praise but outright indignation and opprobrium.”
Below is his full statement…
I liked the confidence with which President Nana Addo told us that his government has paid billions in coupons to bondholders. He also compared economic data not with the opposition NDC’s tenure, but during his own tenure, when all the macro economic numbers reached astromically dizzying heights of 54% inflation, nearly 40 % lending rate and innumerable killer taxes, to what certainly does look like a respite now with inflation around 23% , although taxes have increased in number and value with the highest unemployment rate in a generation with 75 % of Ghanaians financially stressed ( Old Mutual study).
The president and his government deserve no praise in both scenarios. The government supervised debt exchange program occasioned the suspension of coupon payments with most debts restructured amidst wicked financial haircuts. If you deliberately kill your mother and later make a billion dollar contribution towards her funeral, you don’t deserve praise but outright indignation and opprobrium.
In offering rare praise, however, l have to say I do agree with the President’s verdict on the new Agric Minister, Hon. Bryan Acheampong for his dedication and focus on fixing the challenges with the Planting for Food and Jobs. I hope his interventions further reduce food inflation drastically.
Something else caught my attention for rare praise. It was this statement, ”
Mr Speaker, Government, through the National Film Authority, is committed to supporting the production of world class content and films, as well as increasing the cinema infrastructure in Ghana and, by extension, on the continent. To this end, a favourable fiscal (tax) regime for cinema projects, including income tax and VAT incentives, import duty exemptions on film production equipment, twenty percent (20%) tax rebate for strategic film productions and film financing reliefs, is being elaborated by Cabinet, which should be out-doored very soon, and should provide another tangible reason for the choice of Ghana as a film production country”
Good tax policy if implemented right, in addition to a general low cost of production. This shouldn’t lead to the National Film Authority circumventing and abusing the Tax Exemptions Act as we have seen the government do in the 2024 budget with suspicious tax exemptions totaling 12.5bn cedis while everyone gets harrased for 11bn cedis in additional taxes.
This undoubtedly will make our film making industry finally come close to what our brothers in Nigeria are enjoying, for which most of their productions are simply fantastically produced and truly world class, like the latest Netflix produced political drama series I watched a few hours ago- “War: Wrath and Revenge”. Everyone must see the series – with not your usual Naija stars. But the cast, in Mofe Duncan, Rahama Sadau, Yakubu Mohammed, Patrick Doyle, Ayoola Ayolola, Ifeanyi Kalu, Theresa Edem, Bikiya Graham Douglas, Daniel Okosun, Maikudi “Cashman”, Mickey Odeh and Sophia Muhammed, are just amazing!!
Franklin Cudjoe,
Lolobi-Kumasi Kumasi
SALL ‘Republic’