Higher risk premiums on African debt are increasing borrowing costs for countries across the continent, including Ghana, according to Finance Minister Dr. Cassiel Ato Forson.
He stated that this forces African nations to borrow at significantly higher rates than other regions, harming fiscal stability and worsening debt vulnerabilities.
Dr. Forson highlighted the total debt for Africa, which stands at over one trillion dollars, with over 20 nations classified as having unsustainable debt by the end of 2024.
In his view, this financial burden is a key driver of the continent’s rising debt-to-GDP ratios.
The minister made the remarks in Accra after receiving a petition from the African Regional Organization of the International Trade Union Confederation (ITUC–Africa) in collaboration with the Trade Union Congress (TUC) Ghana, which is advocating for the total cancellation of Africa’s debt.
“I think the time has come for us to also pay attention to what constitutes the debt service as a percentage to revenue. This is largely because we are borrowing too expensively. Why should African countries borrow so expensive as compared to its peers in other parts of the world?
Why should the risk premium for African countries be so different from Europe, America and other parts of the world?”
“And because we are borrowing so expensively we have little debt but the debt servicing cost is so expensive,” he added.
He also advised governments to demonstrate greater accountability and transparency in the management of public debt.
“For me the use of debt is also very important. If we use our debt well, we should be able to pay these debts and because sometimes we also don’t properly use the debt that we accumulate.”
“We can’t forever be asking for debt-forgiveness if within us when we get this debt, we misuse it. So it is also important that TUC put pressure on governments to be transparent in accounting for its debts and to use this debt well.”
By: Rainbowradioonline.com/Ghana
