Sub-Saharan African (SSA) countries must begin to invest loans contracted in high yielding infrastructural projects which can pay for themselves, the Deputy Director of the African Department of the International Monetary Fund (IMF), David O. Robinson has said.
That, he said, had become necessary in view of the growing public debt being incurred by SSA countries.
Dr Robinson gave the advice at the launch of the IMF ‘Regional Economic Outlook (REO)’, a semi-annual publication analysing economic developments and prospects of SSA.
The April report, which is on the theme, ‘Recovery amid elevated uncertainty’, dilates on intra-regional trade in SSA and examines the potential benefits and challenges of implementing the African Continental Free Trade Area (AfCFTA).
Dr Robinson in an interview after the launch said in spite of the growing public debt, SSA countries continue to borrow, saying, “What is necessary is for SSA countries to invest the monies in high yielding infrastructural projects which can generate enough revenue to pay the loans.”
The April REO points out that resource-rich country in SSA continue to accumulate high public debts and for instance, it is projected that Ghana’s public debt to Gross Domestic Product would rise to 62.0 per cent in 2019 from 59.6 per cent in 2018.
The Deputy Director of the African Department of the IMF asked for his view about the growing appetite for SSA to raise Eurobonds to fill their revenue gaps said the issuance of Eurobonds presented both risk and opportunities for SSA countries.
In terms of opportunities, he said, “Eurobonds help to address vulnerabilities in the economy and create fiscal space for government.”
First Deputy Governor of the Bank of Ghana, Dr Maxwell Opoku-Afari who was a discussant at the programme, emphasised the need for SSA countries to raise domestic revenue mobilisation to close their financing gap.
He also stressed the “need for efficiency of public investment to ensure value for money” in view of the rising debt vulnerabilities in the region.
The Minister of Finance, Ken Ofori-Atta in his remarks said the AfCFTA was the game-changer to promoting inter-African trade.
He said Ghana was the first country to sign the AfCFTA and expressed interest for the AfCFTA Secretariat to be established in the country.
The Deputy Minister of Trade, Carlos Ahenkorah, in his remark said his outfit was in discussion with the local trade association such as Ghana Union Traders Association and the Ghana National Chamber of Commerce and Industry on the AfCFTA, so that their members would not be displaced of business when the AfCFTA took effect.
By Kingsley Asare
