A Formidable Showdown at the House: The Domestic Debt Exchange Programme Faces Parliamentary Scrutiny
Approaching Deadline for DDEP: Persistent Resistance and Opposition Persist
In the heart of Ghana's political arena, tension has been brewing, as members of the Pensioner Bondholders Forum continue to protest outside the Finance Ministry, casting a long shadow over the controversial Domestic Debt Exchange Programme (DDEP). Amid this unrest, parliament has stepped up, requesting Finance Minister Ken Ofori-Atta to present a detailed briefing on the DDEP implementation to the House.
Parliamentarians feel it's unacceptable that the public and the House have been kept in the dark about the programme's intricacies, an omission they argue only fuels mounting public anxiety.
The Minority Leader, Dr. Cassiel Ato Forson, weighs in, "It's crucial for the minister charged with finance to address the House and provide a comprehensive update on the DDEP's progress." Adding to the chorus, the Speaker of Parliament, Alban Sumana Bagbin, expressed his worry about the ongoing protests by pensioners who are staunch critics of the DDEP. Bagbin directed the Business Committee to expedite the minister's appearance before the House as soon as possible.
The DDEP has sparked considerable disapproval from affected groups such as individual bondholders and pensioners. In the public and private sectors, the programme faces fierce opposition from various quarters, including civil society organizations, academics, finance experts, and more.
Fitch Solutions, in their January 2023 sub-Saharan Africa Market Update, predict that the DDEP could potentially strain the balance sheets of banks in Ghana and ultimately reduce credit to the private sector.
Undeterred, Finance Minister Ken Ofori-Atta has repeatedly justified the necessity of the DDEP, stating that the programme is instrumental in helping Ghana navigate its economic challenges. The government set an administrative window for bondholders to tender their bonds, which was extended to January 16, 2023.
The DDEP's implementation has presented numerous challenges for the Ghanaian banking sector. liquidity constraints have been a significant concern, leading to reduced credit availability and weakening the overall financial health of banks.
This credit crunch could have far-reaching ramifications for the private sector, potentially hampering business growth and investment and leading to economic slowdown and financial instability. To combat this, strategic interventions, like the S.T.A.R. Strategy, have been proposed, with a focus on synergy, technology, analytical precision, and risk mitigation to stabilize and revitalize the banking sector post-DDEP.
[1] https://www.businessghana.com/site/news/77326/MPs-worry-over-DDEP-s-fueling-anxiety[2] https://asare-bonofied.ghanaweb.com/GhanaHomePage/NewsArchive/MPs-call-for-Ofori-Atta-s-explanation-on-Domestic-Debt-Exchange-Programme-640049[3] https://www.modernghana.com/news/1232760/finance-minister-asked-to-explain-domestic-debt-exchange.html[4] https://ghanabusinessnews.com/2022/12/31/4pm-deadline-for-domestic-debt-exchange-programme-today/[5] https://www.ghanaweb.com/GhanaHomePage/NewsArchive/Domestic-debt-exchange-has-caused-liquidity-crisis-report-627201
- The controversy over the Domestic Debt Exchange Programme (DDEP) is not confined to the political sphere alone; it is also generating heated discussions in various business forums, with critics questioning its impact on the market.
- In a recent general-news report, it was revealed that several finance experts have raised concerns about the potential strain the DDEP could put on the balance sheets of banks, which in turn could affect credit availability in the private sector.
- The opposition to the DDEP extends beyond individual bondholders and pensioners; it includes business entities that fear the programme could result in financial instability and economic slowdown.
- Amidst the ongoing protests and parliamentary scrutiny, a finance policy report from Fitch Solutions predicts that the DDEP could impact not just the banking sector, but also the broader business environment in Ghana.
- As the DDEP continues to dominate the domestic general-news landscape, strategies such as the S.T.A.R. Strategy are being proposed to address the liquidity constraints and ensure the financial health and stability of the banking sector post-DDEP.
