Former UN Senior Governance Advisor, Prof Baffuor Agyeman-Duah, has revealed that the leadership of the country is numbed by the easiness with which they can get loans from creditors.
According to him, it is “easy for our leaders to go to the international market and borrow”. This, he stated, makes leaders in the country forget to think of how Ghana can become a truly independent state.
Prof Agyeman-Duah indicated that Ghana has a very interesting history and a global reputation. Owing to this, he explained that oftentimes, these countries which serve as creditors have certain sympathy for Ghanaians.
“… Above all, creditors see loans as part of global system to continuously enslave countries like Ghana. So, if you put all these together, I think our leaders tend to be numbed by the easiness with which they can contract loans.”
Prof Baffuor Agyeman-Duah
Among other things, Prof Agyeman-Duah explained that creditors equally understand how rich Ghana is in terms of natural resources. The resource base, he stated, makes it possible for the country to borrow, even though for “seventeen times we’ve borrowed and find ourselves in a mess”.
“Don’t forget Ghanaians are very good friends in most of these multilateral institutions, so it’s much easier for government to contact their friends get some money.”
Prof Baffuor Agyeman-Duah
Citing previous administrations and governments’ pledges in desisting from the act of borrowing from the international market, Prof Agyeman-Duah questioned why government continues to make the trip back to the doors of the creditors. With this, he explained that “our brains are numbed because it is so easy for them to go and get the money”.
“I can tell you that with this government or any other government, Ghana will go back to the IMF only because we are incapable of putting our house in order… Whenever we go, they give us conditions. So, what is wrong with our thinking caps? The fact is that, the structure of our economy does not address the fundamentals of our existence. I know politicians delighting in throwing figures at us… But for me these are superficial because we know these things and they don’t help us.”
Prof Baffuor Agyeman-Duah
Factors influencing Ghana’s trip to IMF
On his part, economist and risk analyst, Dr Theo Acheampong, revealed that Ghana’s recurring trips to the IMF is no surprise. He stated that the reason comes down fundamentally to the fact that the export base of the economy has barely changed in the last 60-70 years.
“You still got gold, cocoa and most recently oil, we got but we are not doing much in terms of adding value.”
Dr Theo Acheampong
Additionally, he explained that external factors which have impact on the country’s commodity price can either positively or negatively influence such move. He noted that there are also the financial shocks, in the sense that Ghana’s economy becomes much more integrated to what happens with the broader global economy, and anytime the country has issues such as COVID or Russia/Ukraine war, it will impact it.
“The third element of shock is tied to the electoral cycle or shocks. Where you tend to see a lot of out of control government spending that is really not tied into creating value for money, or fundamentally transforming the structure of the economy. So, if you have an economy that is still largely primary commodity producing, but at the same time, you have this massive informal setup within it, then you’ve got the revenue issues and you add on top of that these big external shocks, then every couple of years, you end up going to the IMF for one support or the other.”
Dr Theo Acheampong
Furthermore, Mr Acheampong revealed that external shocks will always be there and more of such should be anticipated. However, he emphasized the need for government to internally organize its policies and dealing to withstand its impact on the economy.
“So, fundamentally then, it comes back to what we do from a structural point to turn the economy around. This is where we go into these IMF programmes, we start implementing the reforms for a year or two, we get out and we are not able to sustain it going for…”
Dr Theo Acheampong
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