Stakeholders discuss solutions to reducing Ghana’s debt stock
Stakeholders on Tuesday engaged in discussions on how the country’s increasing debt stock could be eliminated to strengthen the economy in the near future.
The discussion was organised by the Institute of Fiscal Studies (IFS) on the theme: “Ghana’s Growing Public Debt – Implications for the Economy”.
Dr Johnson Asiama, a former Second Deputy Governor of the Bank of Ghana, said for the country to properly deal with the increasing debt stock, there was the need to develop a risk management framework.
He said the risk management framework would help in sustaining the successes chalked within certain times of the year in the economy to mitigate the unforeseen circumstances.
He said the country should have a risk matrix and develop a list of all factors with potential to suddenly change the country’s economic acceleration.
Mr Isaac Adongo, a Member of the Finance Committee of Parliament, said the country was not generating enough domestic revenue, and that had been contributing massively to the increasing stock of the nation’s debt.
He said politicians had been forced to think within the short term with the analogy that once you begin to think and act for the long term, you are likely to be politically unsuccessful.
Professor Kwasi Prempeh, the Executive Director of the Centre for Democratic Development, said political incentives favour borrowing over revenue mobilisation, adding that, “the pain with borrowing is deferred to the future and with revenue mobilisation, the pain is immediate but the gain is uncertain.”
He said solutions had always looked obvious but the country’s leadership was not working with them, adding that, there was a need for an extra non-political body to manage the debt stock of the country.
Professor Prempeh said the country was running towards 100 per cent political logic in every institution and that would not help mitigate the challenges facing the economy in terms of debt stock.
He said technocrats, whose knowledge were highly needed in the thinking processes of some projects, should help in mitigating debt stock, adding that, “we need to be real and sit up”.
Dr Mark Assibey-Yeboah, the Chairman of Finance Committee of Parliament, on his part said, using debt to Gross Domestic Product as a benchmark for calculating the strength of the economy was misleading, saying that, debt to revenue should be used as the benchmark.
He said if the country could raise enough revenue to finance development projects, the country would be able to reduce borrowing and subsequently eliminate the debt stock.
Dr Kwabena Duffour, the Founder and Chairman of IFS, said public debt was not a political issue but a national issue.
He said the country could borrow but should be able to pay back adding, “It is not the sense of borrowing that is a problem for the banker but the ability of the customer to pay back the loan.”
He said: “Let us be serious about public debt because at the end of the day, it is Ghana that would be disgraced and not the National Democratic Congress or the New Patriotic Party.”
He called for togetherness in tackling the issue of public debt saying, “Let us come together as a nation and look at our public debt issues.”
He urged the country to borrow at all cost but ensure that the monies were used profitably saying, “Let us have value for money otherwise in future, our children will say our parents were irresponsible and have borrowed so much and now we do not know what to do”.