Senior Lecturer at the University of Ghana-Business School, Prof. Lord Mensah has advised government to be decisive on its intended debt restructuring move in order to lock in a programme with the International Monetary Fund(IMF).
His comment comes on the back of the Africa Pulse Report by the World Bank that places Ghana’s debt at a frightening percentage level.
The World Bank’s report for October 2022 indicated Ghana’s debt will jump to 104.6 percent of GDP, from 76.6 percent a year earlier, by the close of this year 2022.
According to its October 2022 Africa Pulse Report, this comes amid a widened government deficit, massive weakening of the cedi, and rising debt service costs.
The report comes at a time the International Monetary Fund (IMF) is conducting a Debt Sustainability Analysis on the country.
The DSA assesses how a country’s current level of debt and prospective borrowing affect its present and future ability to meet debt service obligations.
Commenting on the report on Morning Starr with Francis Abban, Prof. Mensah said unless the government has a restructuring investment plan with the IMF it will not get any deal with the Bretton Woods Institution.
According to him, it’s problematic for the West African nation to have its debt exceeding 100 percent.
“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.
“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 advised.
He continued: “Now they are playing politics with it. So effectively they don’t have that confidence in coming to the investor and telling the investor that look this is the situation we found ourselves in. And as a result of that we may have to restructure your investment.”
Prof. Mensah however advised the government to improve its internal revenue generation and export ratio adding that the government must be quick in telling Ghanaians about the economic situation before going into any deal with the IMF.
