A research fellow at the Institute of Fiscal Studies, Said Boakye, has painted a gloomy picture of Ghana’s economy should the debt restructuring fail to work.
He said the cedi could trade as low as GHC100 to US$1 in no time.
The government has had to revise the terms of the Domestic Debt Exchange Programme (DDEP) following broad consultations with bondholders. However, some individual bondholders are still not satisfied. They want total exemption from the programme.
“If this debt restructuring does not work both domestic and external, I tell people, and the country is not able to secure an IMF programme, the cedi depreciation that you were seeing in 2022 would be just a joke,” Boakye said in an interview with Asaase 99.5 Accra‘s Gemma Appiah.
“The real depreciation would happen,” he added.
He said even though the bondholders are not responsible for the current economic challenges, they must be part of the solution.
“So, at the end of the day participating in some way to help fix the country’s fiscal problems is a sacrifice worth doing,” he added.
“As if I am speaking for the government, but I am speaking for the economy. I care less about the government because we were warning the government not to do what it was doing. Even though they justified that they borrowed those funds to invest, I don’t think so,” he said.
Some financial institutions such as the Ghana Association of Banks, Ghana Insurers Association, and Ghana Securities Industry Association have reached a consensus with the government regarding the terms of the DDEP.