Debt Restructuring: Nothing will change; next 10 years will be rough – Ken Thompson

Kenneth Kwamina Thompson, the CEO of Dalex Finance, warns that Ghanaians should brace themselves for tough economic times over the next decade.

Speaking to Evans Mensah on Joy News’ PM Express, Thompson expressed scepticism about the effectiveness of debt forgiveness, suggesting that it merely postpones Ghana’s economic challenges rather than resolving them.

“I have been speaking about the Ghanaian economy since 2014, and I can assure you, as night follows day, that this $300 million from the IMF is merely covering the cracks; nothing will change,” he said on Tuesday.

He added, “As Ghanaians, we need to start preparing for a rough next ten years. We talk about savings, but when has the government ever met its revenue targets?

“And do you think international creditors are so naive that they won’t take the money if it’s available? Why would they give us a free pass? These are commercial creditors.”

Finance Minister Dr Mohammed Amin Adam recently announced the completion of Ghana’s debt restructuring program with its official creditors.

According to the Karaga MP, the government has successfully restructured $5.1 billion in debt with these creditors and concluded the restructuring of $13.1 billion with Eurobond holders.

Addressing attendees at a UK Town Hall meeting, Dr Amin Adam highlighted that these efforts have resulted in $8 billion in savings for the country.

“Two weeks ago, we concluded negotiations with the official creditors and agreed to restructure $5.1 billion. The government has negotiated well, and we are going to save $2 billion from this amount.“As I speak to you, tomorrow morning, there will be an announcement that we have also concluded our negotiations with the Eurobond holders for $13.1 billion.

“Ladies and gentlemen, when we announce it, please read the details. We have negotiated a good deal for Ghana, resulting in $8 billion in savings,” he said.

However, Mr. Thompson remains unconvinced that the situation will improve for Ghanaians.

“There is nothing that will make me even consider for 1% that anything is going to change.

“The situation with the local currency is not going to change. All that’s going to happen is that as soon as the money comes in, the currency will stabilize temporarily,” he stated.

He predicts that after the December elections, the Ghanaian cedi will once again decline sharply against major international currencies.

“If we couldn’t solve our problems with over $10 billion in six years, how are we going to solve them with three billion?” he questioned.

“Let’s be real. I’ve heard economists talk endlessly, and after the fact, they come and explain what happened. I can assure you that’s what will happen again. When has the government ever met its revenue targets? There’s what you plan on paper and then there’s reality,” he said.

He emphasised that Ghanaians should prepare for the worst as the coming years will be very challenging.“Let’s acknowledge that the next ten years will be very rough. The government will have very little money to work with, and we are also cut off from international capital markets,” he stated.

Thompson advised government to “find ways to cut expenditure and increase income.”