Ghana’s domestic dollar bonds exchange expires

Ghana's invitation to exchange $809.9 million in domestic dollar bonds for a package of new bonds with lower rates and longer maturities has expired. John Gatsi, Dean of University of Cape Coast School of Business, discussed the debt exchange program in an interview with CNBC Africa. The domestic debt exchange program, which was a requirement from the IMF in exchange for a $3 billion loan, has been met with mixed reactions from investors. While there have been challenges, including investors having to take a haircut, Gatsi remains cautiously optimistic about the outcome of the program. Reflecting on the debt exchange program, Gatsi highlighted the importance of consultation and agreement between the government and creditors. He emphasized the need to respect investors and creditors, allowing them to participate in the decision-making process. Gatsi noted that by involving creditors in the discussions, the outcome can be mutually beneficial for both parties. As the debt exchange program comes to a close, Gatsi believes that positive news may be on the horizon. Looking ahead, Gatsi emphasized the government's role in restoring confidence in the capital market. He pointed out that the government needs to work on managing the economy effectively to boost investor confidence. While there have been gains in other sectors, such as revenue generation from various sources, including VAT enforcement and gaming revenue, challenges remain with the Ghana Revenue Authority collecting tax debts. Gatsi also discussed the concerns raised by Ghanaians regarding overtaxation and the challenges faced by businesses. He highlighted the need for the government to strike a balance between increasing revenue collection and alleviating the burden on citizens. Despite efforts by the Ghana Revenue Authority to employ technology and innovative tax collection methods, concerns persist regarding the perceived intimidation faced by taxpayers. Furthermore, Gatsi shed light on the struggles faced by citizens due to high food prices and inflation. He noted that while conversations about palliative measures to cushion the effect of the cost of living crisis are ongoing, there is a lack of concrete actions to address the suffering of the population. With a significant number of Ghanaians at risk of falling into poverty, there is an urgent need for targeted interventions to alleviate the economic challenges. In conclusion, as Ghana navigates the complexities of debt management, revenue generation, and economic stability, the government faces the critical task of balancing fiscal policies to ensure sustainable growth and support for its citizens. The challenges highlighted by Gatsi underscore the importance of transparent and consultative approaches to economic decision-making, emphasizing the need for effective governance and policy implementation.