The former CEO of Dalex Finance Company, Kenneth Kwamina Thompson, says although Ghana’s debt restructuring programme with its official creditors has been completed, there is no hope that things heading for good in the future.

Speaking on PM Express on JoyNews, he explained that Ghana having its debt forgiven does not solve the plethora of issues including inflation, high cost of living, cedi depreciation and unemployment among others facing the country.

Creating an analogy of the current situation, he said “Ghana is required to downsize from a house in Cantonments with six bedrooms to one bedroom in Kobi. Somebody gives you some money to help you with the transition and you celebrate? Is it politics?”

“If you were earning GHS3,000 six years ago, and you are earning GHS4,500 now, that money is worth less than $1,500 today. You can't survive. Our roots have potholes, it's a litany of issues. This action will not solve any of our problems,” Mr Thompson said.

He stated that despite the Finance Minister’s optimism that the new debt restructuring agreement with external creditors will help facilitate criteria infrastructure, Ghana has no money to fund such.

“You think if we had $4.7 billion to give away, the creditors wouldn’t take their money? And we forget that the money that we borrow is people's pension funds, people's investments.

"I have been in the business of lending money, writing off debt is not a small matter. And we've got to face the issue, deal with the reality, and not put pampers on Ghana. It's not going to work.”

Mr Thompson insisted that “nothing has been said to give me any hope that the next few years will not be rough. Nothing has been said, absolutely nothing.”

This comes after the government has reached an agreement in principle with two bondholder groups to restructure around $13 billion of its debt.

The agreement will see Ghana's bondholders forego about $4.7 billion of their loans and provide cash flow relief of about $4.4 billion up until 2026 when the country's current International Monetary Fund programme ends.

The IMF described the agreement as "a significant positive step" for Ghana. The committee representing its international bondholders said it would give the country a path to economic recovery.

The government is also proposing two options, under the deal. This is the P.A.R. and Disco Option. 

According to the agreement, investors who take the Disco option will receive three new bond instruments.

However, the P.A.R. option will have up to ¢1.6 Billion CAP.

The agreement will also ensure that the government will enter into Non-Financial Terms, described as a most favoured creditor clause that will ensure that other creditors do not receive better net present value terms.

• Read More: Eurobond holders expected to forego $4.7bn in debt restructuring deal

The Bondholders have also agreed to a 37 per cent haircut on their interest and maturity. 

Meanwhile, former Finance Minister Seth Terkper believes this deal affects Ghana's legacy.

Speaking on JoyNews’ PM Express, he explained that to some extent this debt forgiveness will ease a bit of the stress on the economy and facilitate the release of the subsequent IMF funds.

However, Mr Terkper said that despite this upside he had mixed feelings about debt forgiveness noting “What legacy are we leaving? As a country, HIPC was total debt forgiveness, within two decades of default, and here we are being forgiven again. Is this a legacy that we want for Ghana?"

• Read More: We are being forgiven again, what legacy are we leaving? – Seth Terkper

But, on the other hand, the Director at the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Prof Peter Quartey believes the country's official completion of debt restructuring with creditors will restore some certainty in the financial market.

“Financial system doesn’t like noise, It doesn’t like uncertainty and so for me clears the way for many things to happen. More inflows may come in. It also clear the way for people to invest properly and also it will certainly have some positive effect on the exchange rate and by extension inflation,” he said.