After serving over 30 years in Ghana’s police force, retired Chief Inspector Emmanuel Amey-Wemegah had mapped out a clear plan for his retirement. He intended to use part of his pension to invest in government bonds, finish building his house, and purchase a car.
Everything was on track until January 6, 2023, when he received an unexpected call from his bank. Ghana was restructuring the government bonds he had invested in.
“I began to sweat,” the 63-year-old recalled, describing the fear and uncertainty that overcame him and thousands of other investors.
Amey-Wemegah is one of many private, corporate, and foreign investors impacted by Ghana’s 2023 domestic debt restructuring program. This initiative was a condition for securing a three-year, $3 billion International Monetary Fund (IMF) bailout, aimed at addressing the country’s worst economic crisis in decades.
As Ghanaians prepare for the presidential election on December 7, Amey-Wemegah’s struggles highlight the broader economic concerns affecting millions in the country, which is the world’s second-largest cocoa producer. Economic issues such as job creation, education, and infrastructure are central to the election discourse.
During the tenure of the current government, Ghana’s economy was hit hard by the COVID-19 pandemic, the war in Ukraine, rising global interest rates, and years of excessive borrowing. Public debt surged from 63% of GDP in 2019 to 92.7% in 2022. Meanwhile, the cedi currency suffered rapid depreciation, inflation soared above 54%, and businesses were forced to scale back operations.
Facing a towering domestic debt, the government saw no alternative to securing an IMF deal without restructuring local bonds—a move unprecedented in Africa.
Launched in December 2022, the domestic debt restructuring program required investors to exchange old bonds for new ones with lower interest rates and extended maturity periods.
“Some of us didn’t fully grasp the implications,” Amey-Wemegah said from his home in Dabala, southeastern Ghana, where plaques commemorating his service adorn the walls.
“They’ve taken our money. It left me heartbroken and devastated,” he said, explaining how the reduced bond yields have squeezed his income.
Amey-Wemegah can no longer afford to fuel or maintain his car and must prioritize spending on medication.
Businesses have also been hit hard. A consultancy firm based in Accra, which asked to remain anonymous, reported that its 2 million Ghanaian cedis (approximately $130,718) were locked up in the restructuring. This has strained the company’s finances, forcing layoffs.
Dissatisfaction with the Ruling Party
The upcoming election is expected to be a showdown between Vice-President Mahamudu Bawumia of the ruling New Patriotic Party (NPP) and former President John Dramani Mahama of the opposition National Democratic Congress (NDC).
Polls conducted by Global InfoAnalytics, an Accra-based organization, suggest that economic hardships, particularly the rising cost of living, are influencing voter sentiment.
For voters like Amey-Wemegah and the affected business owners, frustrations over the debt restructuring are shaping their electoral decisions.
“We’ve turned to the IMF 17 times,” Amey-Wemegah said, referencing Ghana’s history of fund-assisted bailouts since gaining independence in 1957. “None of those governments imposed haircuts on investments. Why did this government choose to do so?”
Others, like rice miller Julius Kwadzo Ameku from the Volta Region, criticize the government’s broader economic management.
Ameku, whose business has been affected by what he perceives as failed agricultural policies, hopes for a change under Mahama’s leadership.
“What we need is proper irrigation and access to flexible loans or grants,” he said. “The focus on gold and oil won’t solve our problems.”
Source: TheDotNews