According to Chartered Economist Emmanuel Amoah Darkwa, the so-called success of the domestic debt exchange program is not the end.
He explained that we face a difficult challenge in resolving our external debt issues.
He stated that our current external debt is dependent on commercial loans, and that this is where our negotiations will be difficult.
“In the past ten years, the majority of our loans have hinged on commercial loans. It will be difficult for us to negotiate. This is because negotiating with a private individual or an institution that has invested in your bonds is more difficult than negotiating with a country to which you are indebted. It would be far easier to be indebted to China and negotiate your way out of the loan.
The government must make a strong case because our appetite for debt over the last decade has been excessive. Our debt to GDP was less than 30% when President Kufour took us to HIPC. However, our public debt to GDP has surpassed 100% and is now the current situation. We must consider the best way to address this issue. We will face difficulties if we take out loans and do not put them to good use. We borrowed money for recurrent expenses rather than capital expenditure.”
He emphasized the importance of our leaders abandoning this approach to save the country from these challenges.
“We have completed the domestic program and are now dealing with external issues. The success of the external program will be determined by the government’s negotiations with the creditors. If it is successful, the IMF will review and approve our application.”
He concluded by urging our leaders to address our revenue mobilization issue and reduce excessive and unnecessary spending. That is the most effective long-term economic management strategy for us.
By: Rainbowradioonline.com/Ghana
