China, which is Ghana’s largest bilateral creditor, has urged the International Monetary fund (IMF) and World Bank to offer debt relief to the country by participating in its external debt restructuring program.
According to China’s Foreign Affairs Minister, debts owed by Ghana to both the IMF and the World Bank should be restructured, given that the two institutions are also major creditors to the nation.
This move follows the Bretton Woods Institutions’ call for debt restructuring of developing countries, including Ghana, to reset debt levels to sustainable levels and, in some cases, to help secure bailout programs.
Ghana’s total debt owed to external creditors stands at $29.2 billion, with Eurobonds accounting for $13.1 billion, multilateral accounts for about $8.1 billion, Paris Club countries for $1.9 billion, and other creditors accounting for $3.2 billion.
Against this backdrop, Ghana’s Finance Minister, Ken Ofori-Atta, is currently in China engaging with representatives of the Chinese government on debt restructuring. The meetings, which were set to take place from March 23rd to March 24th, 2023, will end today for the country (Ghana) to know her stands.
The success of these discussions is pivotal for Ghana as it seeks to restructure $5.7 billion of its external debt, with China holding a third of the figure, amounting to $1.7 billion. China’s involvement in Ghana’s debt restructuring program has been critical, given that the country is the largest bilateral creditor to Ghana.
Ghana Is Not Poor, We Are Only Being Poorly Managed – Dr. Ali-Nakyea
However, Dr. Abdallah Ali-Nakyea – a tax expert, has disclosed that Ghana is not a poor country but her mismanagement by the leaders has led the country to go under the feet of China and IMF to sought for help.
His comments follow the conditionalities attached to the imminent $3billlion IMF bailout to the government of Ghana; conditions which include restructuring of the country’s debts – a programme that has met stiff domestic resistance.
Chiding the government, Dr. Ali-Nakyea asserted that mismanagement and corruption have landed the government in the tentacles of the Bretton Woods institution.
“My key issue is corruption. We cannot run away from it. The lifestyle of some government appointees make nonsense of claims that the country does not have money. How can they live that way if we don’t have money? That is why I am saying that Ghana is not poor…we are only being poorly managed.”
Dr. Ali-Nakyea
Dr. Ali-Nakyea who teaches Law of Taxation at University of Ghana School of Law further argued that closing the leakages in the tax collection system would help the country to avoid borrowing money on unfavourable terms.
The tax expert referenced the past three years; 2020, 2021 and 2022, where he noted the Ghana Revenue Authority (GRA) exceeded its targets as a result of automating the collection processes.
“Once you automate, the tendency to hide any income or misapply revenue can be solved. It can curb a little bit of the corruption. And then once we try to close the tax gap and all those who are required to pay, pay, we don’t need to go borrowing.”
Dr. Ali-Nakyea
He also called on the government to cut its expenditure, a call numerous critics have made, with the Minority in Parliament currently seeking to block new Ministerial appointments by President Akufo-Addo.
The MPs argue the government’s’ size is already huge and the President should be merging Ministries and relieving redundant Ministers instead of adding to the number.
The President, however, remains adamant to the critiques.
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