Bright Simons has urged for the passage of legislation to create a framework for controlling government insolvency

Bright Simons, Honorary Vice President of IMANI Africa, has urged for the passage of legislation to create a framework for controlling government insolvency.

He says that identical laws to those used by private individuals in bankruptcy would offer investors security about the probable results if the government is unable to pay its bills.

He stated that most debt-restructuring countries have passed legislation to include a collective action mechanism in their domestic debt instruments in order to facilitate negotiations between investors and the government.

On JoyNews' Newsfile on Saturday, Bright Simons argued that such a rule would ensure the program's effectiveness and clarity.

The truth is that we need laws in order for things to be fully effective because they provide clarity. Furthermore, the majority of countries that have done so have attempted to create a framework by going to parliament.

“Why? Because of two factors: first, the government is attempting to enforce unilateral CACs (collective action clauses) through private contracts while refusing to pay for creditors, particularly domestic creditors, to organize in order to properly bargain.

"These collective action clauses merely suggest that they are aiming to include measures into the contract that will cause certain creditors' actions to affect everyone. 

Given the limited space available, it makes sense to specify the broad regulations that will govern the contractual agreement. "And Greece did it," he said.

Godfred Dame, according to Bright Simons, "was answering the wrong question" on the Attorney General's opinion on the debt restructuring program.

"The problem is not whether you can enact a law that takes people's property away from them by going to Parliament, which is where he is concentrating his efforts." The question is whether we need regulations similar to those enacted when private individuals declare bankruptcy during a period when the government itself is declaring bankruptcy. 

Consider the status of the banks. For example, in 2016, we passed legislation that includes particular measures for dealing with circumstances in which a bank must be wound up or reformed. The banks that were operating in this country previous to 2016 were included in the bank restructuring, but the law was nevertheless used to ensure an orderly resolution.

"Consequently, the fact that we require laws to regulate what will occur in a bankruptcy situation in which the government is the debtor does not entail legislation to retrospectively dispose of individuals, as the Attorney General is discussing.

"Now, what we need is legislation similar to what was approved in Barbados, Greece, and elsewhere to give investors confidence in what will happen if the government is unable to pay its bills.

"And in Barbados, the law goes a lot further to increase the body of legislation that affects even municipal arrangements and things like that, and how it would differ from central government and things like that," he explained. Furthermore, the statute adds to the body of legislation.

Bright Simons has blamed the government's approach to the debt exchange program. 

 Bright Simons, IMANI Africa's memorial Vice President, has blamed the government's approach to the debt exchange program. 

 

 He also said on JoyNews' Newsfile on Saturday that the" current approach is fairly abnormal" in expressing his displeasure with the program. 

 He asserted that the strategy is grounded on a headlong rush, which poses a problem. 

 Countries infrequently essay to restructure their debt in the manner in which Ghana is pacing. 

 He continued," So if you recall, the first time the fiscal assiduity and investors were told outspoken that Ghana is surely going to overpass was on December 2, and at that time the government anticipated to getting a deal in two weeks because it launched the factual process on December 5 and said the deadline is December 19, which was unknown." 

 

 Simons praised Barbados's approach and cited a case in which the country restructured both its internal and external debt. 

 He stated," Barbados took 18 months to make the agreement that was necessary before officially launching the debt exchange," and" frequently when you do that, it takes a couple of months and you're through if you formerly have the agreement." Before officially launching the debt exchange, Barbados took 18 months. 

 

 “ Look at Grenada, which has been in a situation analogous to ours for about 30 months, and Jamaica, which has been in a situation analogous to ours for about 30 months. The average quantum of time in the Caribbean that has seen the most debt restructuring per capita is about 13 and a half months, so these one week, two weeks. You have to do this snappily has noway happened  anywhere in the world, ” he continued. 

 As a result, he stated that the government's current involvement with stakeholders regarding the program should have passed times agone

 

 The government has proposed that bondholders in a debt exchange program won't admit interest during the financial time of of 2023 in order to achieve agreement with the International Monetary Fund( IMF) and stabilize the frugality. 

 In the meantime, multitudinous bondholders requesting impunity from the program have largely rejected the debt exchange. 

 

 The" only reason this is passing( rejection) is that government persistently failed to face out to the fact that Ghana's debt was unsustainable,"  Mr. Simon added. 

 

 He said that although other countries have gone through an analogous restructuring, the government" should not try and suggest a supreme debt dereliction," which further placed Ghana's environment in relation to others around the world.