The Ghana International Trade and Finance Conference (gitfic) has called for debt cancellation for Ghana to give the country some financial relief.
According to the gitfic, the growing public debt could dampen the growth of the country.
Gitfic made the call during a discussion on its two latest research publications in Accra yesterday, and said Ghana had reached its maximum threshold of public debt, which was above 90-92 per cent of Gross Domestic Product.
The two research papers titled “Global Debt to Gross Domestic Product Post COVID-19 (Sub-Saharan Africa) and “Unravelling the Global Central Bank’s Losses,” examined the debt situation and Central Bank losses across the world.
Making a presentation on the topic “Global Debt Gross Domestic Product Post COVID-19 (Sub-Saharan Africa)”, the Director, Research, Policy and Advocacy of gitfic, Gerald Ekow Woode, said Ghana’s growing public debt could limit spending and hamper the country’s economic growth.
He said the COVID-19 pandemic created serious challenges for Ghana such as disruptions in trade, decline in commodity prices, and reduced tourism.
“The pandemic led to a contraction in economic activities, resulting in increased government spending to address health emergencies and support affected sectors,” he said.
According to Mr Woode many governments in Sub-Saharan Africa, including Ghana resorted to borrowing both domestic and foreign loans to fund infrastructure, social safety nets, and economic stimulus packages, and exacerbated the debt situation of the country.
Among other recommendations, he said, there was the need for Ghana and Africa to expedite the establishment of “bold new initiatives”, saying African countries in collaboration with their creditors should come up with inventive solutions that went beyond temporary suspensions.
“African countries should redefine what constitutes debt sustainability. The COVID-19 crisis has revealed the limitations of existing criteria for prudent debt practices and sustainable development,” Mr Woode stated.
He said there was the need to reform the international debt architecture in line with the current global debt dynamics.
The Chief Executive Officer of gitfic, Selasi Koffi Ackom, said it was in the interest of the country’s commercial and bilateral partners to forgive Ghana its debt to promote the growth of the country.
He said gitfic would do a lot of advocacy next year on the Global Debt Initiative to mobilise the global community and international organisations for debt relief for Africa and Ghana.
Mr Ackom said current economic challenges was not peculiar to Ghana and the government and the Bank of Ghana could not be blamed for the current economic challenges.
In a presentation on the research paper “Unravelling the Global Central Banks’ Losses,” he said the Bank of Ghana (bog) could not be blamed for incurring loss in 2022.
He said the bog did what other Central Banks in the US, UK, Switzerland did to save their economies from collapse.
The Governor of the bog, Dr Ernest Addison, in remarks made on his behalf by the Director of Research, Dr Philip Abradu-Otoo, said the bog last year pumped GH¢39.7 billion into the economy to prevent it from collapse.
He said the amount was used to support the government to meet its local matured debts.
Dr Addison said the bog took the biggest hit in the Domestic Debt Exchange Programme as to help the government to meet the requirements of the International Monetary Fund programme.
That, he said, led to the GH¢60.8 billion loss the bog incurred last year.
Dr Addison commended the gitfic for conducting the two studies, saying they were timely.
BY KINGSLEY ASARE
