Rescind your decision against Debt Exchange Programme, rather support it – CIMG to labour unions

The Chartered Institute of Marketing Ghana (CIMG) has advised labour unions kicking the Debt Exchange Programme to rescind their decisions.

According to the President of the institute, Dr Daniel Kasser-Tee, this is necessary to support the government’s quest to revive and ensure a stable economy.

The government began a debt exchange programme last week expected to impact bonds and consequently pension funds.

But speaking at the 32nd CIMG President’s Ball and induction of new members, Dr Kasser-Tee, said bringing the economy back to its feet should be the major concern of all and sundry.

“Many professional associations have publicly declared on behalf of their members they will out rightly reject the government’s proposed Debt Exchange Programme. They are, understandably, unhappy with the sheer depth of the ‘haircut’ they and their members are being asked to accept.

“However, my advice, based on what I have heard experts say, is that they take a step back, control their anger and emotions, and take a good look at the situation we [economy] are faced with”.

“Simply put, the government has warned that it is no longer in a position to meet its domestic debt servicing obligations on both interest payments and principal amortization upon maturity now. Therefore, as unpalatable as it may appear to be, acceptance of the proposed Debt Exchange Programme is the only way forward for investors of the affected government debt securities, if we want to eventually get our monies”, he pointed out.

“If we refuse to participate, the government will simply default on its repayments under the original terms, and unfortunately, there is very little we can do about it”, he added.

He, however, asked the government to quickly engage relevant stakeholders to gain their support for the successful implementation of the debt exchange programme.

Dr Kasser-Tee also called on the government to further work on its communication structures to carry Ghanaians along on its decisions.

“That said, I want to use this platform to persuade the government to improve its communications with the people. They must do this effectively through both the government communications set-up as well as their party communications structures.

“The frequent rush dumping of information, which usually comes after the fact is not helpful. Public Relations is about deliberately planned top-level management communications activities aimed at the harmonisation of stakeholder interests.”

The debt restructuring will see a slash in interest payments for domestic bondholders to zero percent in 2023 and five percent in 2024.

Existing domestic bonds as of December 1, 2022, will also be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037 – all in a bid of restoring the nation’s capacity to service its debt.

Under the programme, however, treasury bills and individual bondholders will not be affected while there will be no ‘haircuts’ on the principal of bonds, the government said.