H.E. Former President John Mahama says the President, Nana Akufo Addo must make the big and very important call and begin the process to restructure Ghana’s debt before we become like Sri Lanka, which has sunk into unimaginable economic and social crises.
According to him, Ghana’s public debt has exceeded GHS 400 billion, if debts on the books of some SPVs and statutory funds, which this government seeks to exclude, are factored in. This translates into a debt to GDP ratio of over of 80%, well beyond the red line of 70% at which Lower Middle-Income Countries are declared as debt distressed.
Speaking at the launch of Think Progress Ghana, John Mahama said the NPP Government has mismanaged the economy and left it in such a terrible state that fiscal consolidation alone will not do the trick.
“We require comprehensive debt restructuring to obtain the sort of relief that will give us the fiscal space needed to ease our plight.”
In the last few days, there has been talks from some regime actors about a potential or impending IMF programme.
H.E. Former President Mahama is of the view that due to the nature and depth of Ghana’s economic problems, the NPP government virtually has no other sustainable option.
He said IMF programmes come with fiscal consolidation and insistence on fiscal discipline, which can lead to some recovery and improvements on the macro-economic front.
Debt restructuring has therefore become unavoidable if we are to ever overcome the present economic problems, stressing that even more importantly the unbridled and unsustainable borrowing must stop.
“We can no longer afford to dither and fiddle while our economy heads for the precipice. The consequence of that will be too grave to comprehend.”