Investors did not begin to dump Ghana’s bonds because of E-Levy – Bright Simons

The Vice-President of IMANI-Africa, Bright Simons, has stated that investors started ditching Ghana’s debt long before issues of the E-Levy arose.

According to him, it began in September 2021 even before the 2022 budget was read.

In a Twitter post, he said: “Let us be absolutely clear. Investors did not begin to dump Ghana's bonds on the international capital markets & start to treat the country's debt as distressed when Parliament refused to pass e-levy. That trend began in Sept 2021 well before the budget woes.”

He added that Ghana was not able to raise money and was cut off from the international market.

Bright Simons however debunked claims that the Minority’s opposition to the E-Levy was the reason Ghana has lost access to the international market.

“They did that when the country went back for $1.5bn/$2bn just a few months after raising $3bn in Eurobonds in early 2021. This attracted adverse scrutiny & made more investors switch on to very loose fiscal policies & unsustainable debt. Ghana FAILED to raise money & was cut off,” he wrote on his Twitter page on November 19, 2022.

In January this year, rating agencies began downgrading Ghana’s economy after its debt reached unsustainable levels.

“This was well before Parliament refused to pass the e-levy and/or hold up the budget. Once Ghana was blocked from the Eurobond market, which was how it supported its reserves, a joint debt & currency crisis was inevitable. The rating agencies had no option but to step in,” Bright Simons said.

Appearing before the ad hoc committee, the finance minister attributed Ghana’s “woes” to the resistance by the Minority in Parliament.

He said: “Sadly, the Minority Leader, when this government was compelled to approach the Fund this year, triumphantly took credit for frustrating the government’s efforts to meet its half-year revenue targets.”

“He told the Parliamentary Press Corps last June that, “Thanks to the opposition Government has already lost half-year revenue. That can only be attributed to the purpose and tenacity of the Minority Group in Parliament,” he added.

1/
Let us be absolutely clear. Investors did not begin to dump Ghana's bonds on the international capital markets & start to treat the country's debt as distressed when Parliament refused to pass e-levy. That trend began in Sept 2021 well before the budget woes. pic.twitter.com/Nk0SaVJcl8

— Bright Simons (@BBSimons) November 19, 2022

They did that when the country went back for $1.5bn/$2bn just a few months after raising $3bn in Eurobonds in early 2021. This attracted adverse scrutiny & made more investors switch on to very loose fiscal policies & unsustainable debt. Ghana FAILED to raise money & was cut off. pic.twitter.com/twScgMh6f8

— Bright Simons (@BBSimons) November 19, 2022

3/
This was well before Parliament refused to pass the e-levy and/or hold up the budget. Once Ghana was blocked from the Eurobond market, which was how it supported its reserves, a joint debt & currency crisis was inevitable. The ratings agencies had no option but to step in.

— Bright Simons (@BBSimons) November 19, 2022