Domestic Debt Exchange: Economic recession will affect population’s health – Psychologist
Dr Johnny Andoh-Arthur, a Social and Community Psychologist, says an economic recession arising out of Government’s Domestic Debt Exchange (DDE) will affect the population’s health.
He has, therefore, urged the Government to engage individual bondholders in the best way forward for a win-win outcome for all under the Programme.
In an interview with the Ghana News Agency on Wednesday, he noted that the average individual bondholders fell within the middleclass category, either having many people looking up to them or depending on others, as such, denying such persons expected returns from their investment in an agreed maturity period, may have dire consequences far beyond them.
“We are in a crisis, and all hands must be on deck. However, Government needs to show the way by engaging critical stakeholders on a way forward that will yield a win-win outcome for all. The average individual Bondholder in Ghana is in the middle-class category and might be an employer with many employees who look up to him or her for their daily bread. He or she might be an employee or a retiree who has many dependents.
“… Government should be mindful that economic recession affects the population’s health and health has several determinants, including incomes and employment,” he said.
The Domestic Debt Exchange Programme is an invitation to bondholders to exchange certain domestic notes and bonds of the Republic of Ghana, E.S.L.A. Plc, and Daakye Trust Plc (collectively, the “Eligible Bonds”), for new bonds.
The Invitation to Exchange is an arrangement through, which holders of Eligible Bonds will submit their holdings of Eligible Bonds governed by Ghanaian law and denominated in Ghanaian Cedis (GHS) for new benchmark Government of Ghana bonds with the same aggregate principal amount, and which have in the aggregate a lower average coupon and extended average maturity than the Eligible Bonds.
This transaction is an essential element of the Government’s economic reform programme being undertaken and for which the Government is seeking support from the International Monetary Fund and other development partners.
Dr Andoh-Arthur, also a Senior Lecturer at the Department of Psychology, University of Ghana, said mental health was not merely the absence of mental disorders or symptoms but also a resource supporting overall well-being and productivity.
He said sustainable incomes, financial investment, steady employment, welfare and social support, amongst others were some of the resources that critically caused negative health impact during economic recessions.
“Government has a responsibility to create such health resources and should not be seen to deprive citizens of these resources. A lost fiduciary obligation of Government towards citizens can easily lead to a state of anomie. When people see Government officials ‘bite the bullet’ through modest lifestyles and drastic cuts in government expenditure, trust me, they will do whatever it takes to offer their support in various ways to help. After all, we are in it together, and we need to come out together,” he added.
He said bonds were investment instruments and by investing in such instruments, the individual bondholders had mortgaged their present comfort to make their money available for use by the Government to run the country.
The Psychologist said that individual bondholders chose a patriotic route to invest their funds with the expectation that the Government in due time when those bonds matured would commit to paying them their returns.
“This is a socio-economic transaction that is underpinned by mutual trust. Thus, when conditions precedent to such transactions are varied without proper recourse to these individuals, trust is broken, and the psychological consequences can be dire. Trust is a psychological state, and individuals in trust relations usually intend to accept vulnerabilities based upon positive expectations of the intentions or behaviour of others with whom they share trust.
“The question we need to ask is has the Government acted in a manner that makes individual bondholders perceive or have a positive expectation of its intentions as far as the inclusion of individual bondholders in the Domestic Debt Exchange programme is concerned?” He asked.
He said individual bondholders may be resisting their inclusion in the DDE programme probably because they perceived a broken trust and threats to their existence with their perceived loss of funds, adding that, in the long term, that could lead to hopelessness and helplessness, all linked to outcomes such as depressions, substance use, and even suicide.
Dr Andoh-Arthur said in times of economic downturn, Governments were obliged to provide safety nets for citizens, especially the most vulnerable, but in cases when Government was being perceived to go after individual’s own ‘safety nets’ in a manner as was being done with the DDE, it could lead to agitations that may have national security implications.
“Let’s remember that we had banking sector crisis that created its own problems. This was followed by COVID-19 and its attendant health, social and economic impacts. The cumulative effects of these two issues are still lingering both at the individual and population levels. What the people need is a period to recover from all these shocks. We do not need to impose further burdens while admittedly, we all need to rally behind the Government to steer us out of this situation,” he said.
The Psychologist advised individual bondholders to prioritise their lives and take good care of themselves by building resilience to buffer the negative impact of the economic downturn.
“Let’s feed our minds on positive things, do a lot of physical exercises, eat healthy diets, maintain good social networks, live prudently, and diversify your investments. We must also report signs of adverse health conditions, be it physical or psychological to the nearest hospital for urgent help.”
Dr Andoh-Arthur encouraged the bondholders to come together as a body to engage Government, whilst being hopeful and trusting that something good would come out of a collective engagement.
“This is the time we should see the meaning in the expression, ‘United we stand, divided we fall’. No single individual bondholder can meaningfully engage the whole machinery of government on the way forward,” he said.
He encouraged friends and relatives of bondholders to provide them with the critical social, informational, material, and emotional support to navigate the “stormy waters” and advised the religiously inclined to look up to a higher being while working out practical strategies to confront the times.