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We don't have what it takes for $50 billion Century Bond-Economist

Written by  Sep 26, 2018
Economist, Jerry Jelili Afolabi, has opined that, the comments by Finance Minister on the $50 billion indicates that government ‘’is bent on’’ signing onto the bond despite expert views. In his view, it is not a step in the right direction for Ghana to sign onto the century bond. He said, already we have a huge debt stock with a high GDP to debt ratio with marginal difference of just 4 per cent. Mr Afolabi explained the $50 billion is not small money and we are talking about paying it for 100 years. He quizzed, where would those who would contract the bond be in the next 10-50 years? We shouldn’t be self dependent when taking decisions.’’ Minister of Finance, Ken Ofori-Atta, has expressed optimism that the century bond will contribute to strengthening the falling cedi. Speaking with the parliamentary press corps on Monday, 24 September 2018, Mr Ofori-Atta said the government is exploring several means in its bid to stabilise the currency. “For now, we are structuring what we call the century bond of $50 billion, and a successful century bond will then make everybody pretty comfortable about the future of our needs for both infrastructure and the foreign exchange we need, so that we have more stability”. Mr Ofori-Atta continued: “As you also begin to see the realisation of industrialisation, that means that something like food, which we used to import about $2.4 billion a year, we will begin to cut down on that; that is a lot of savings”. Details of the bond will be outlined in the 2019 budget statement, Finance Minister Ken Ofori-Atta has said. According to Mr Ofori-Atta, the budget statement which is expected in parliament on November 15 will give clear information and strategies on how the government intends to raise the fund. The process to raise the fund will begin after parliamentary approval, he said. But Mr Afolabi is arguing that, the years earmarked for its repayment in dollar term would further depreciate the cedi and so, we should be very careful. I don’t think we have what it takes to sign onto this century bond. I think government should be strategic and circumspect in some of the decisions they are taking today. We need not to take decisions that would hurt generations after us.’’ He called for broad stakeholder consultation and added, I will not advice any government to go for the bond at this time. Mr Afolabi said, the economy of Ghana is facing serious challenges because we are signing onto too much loans.
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