Government must be candid with the International Monetary Fund (IMF) on Ghana’s debt situation to ensure that the nation reaches a good and satisfactory deal with IMF- Senior Lecturer at the University of Ghana-Business School, Prof. Lord Mensah advises.
His remarks follows Africa Pulse Report by the World Bank which places Ghana’s debt at a frightening percentage level.
The World Bank’s report for October 2022 indicated
Ghana’s debt will soar to 104.6 percent of GDP, from 76.6 by the close of this year 2022 which of course is not something to laugh about looking at economic conditions now.
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It again highlighted the government’s debt deficit, rising debt cost and continuous cedi depreciation.
He made these remarks on the report on Morning Starr with Francis Abban, Prof. Mensah explained by saying unless the government has a restructuring investment plan, it is very unlikely to reach a deal with the IMF.
He added that for a country like Ghana to have its debt surpassing 100 percent is a problem.
Prof. Mensah, advised the government to enhance its internal revenue generation and export ratio, adding that the government need to hurriedly tell Ghanaians about the economic situation prior to the IMF deal.
Debt restricting in a lay man’s understanding allows public or sovereign entity going through liquidity challenges and funding problems to reduce its debt by renegotiation to restore confidence in its fiscal state.
“The government seems to be wobbling on its decision to either call for debt restructuring and they are waiting to come and tell us that it’s the IMF that is calling for debt restructuring. But I am telling you that the IMF will not call for debt restructuring” he remarked.
“But for us to get a program with them we have to do that because they will not lend to any country that is in debt distress. So we may have to negotiate on our debt and I am expecting the government to be bold enough to come out,” the senior lecturer added. “Now they are playing politics with it so effectively they don’t have that confidence in coming to the investor and telling the investor look this is the situation we find ourselves in and as a result of that we may have to restructure your investment.”
