Ghana has struggled to contain its debt since independence including the unilateral and unceremonious debt repudiation in the 70s by its Military Head of State, General Acheampong. Ghana’s debt had ballooned from a negligible amount in 1960 to over USD 500 million in 1965. Coupled with other factors, the then president headed for the International Monetary Fund (IMF) in 1965; (the country’s perhaps 1st encounter with the Fund since it officially joined on September 20th 1957, though Ghana’s first President, Dr. Kwame Nkrumah rejected that offer).
Except for Liberia (21 times), Kenya (19 times), Ghana occupies an unenviable 5th position (16 times) in the number of times assistance has been sought from the IMF (Bretton Woods) in Sub-Saharan Africa (SSA). As the nation’s debt towards the end of 2000 was life threatening, economic salvation was found in Highly Indebted Poor Country (HIPC) and the Multilateral Debt Relief Initiative (MDRI). The combined debt relief brought the country’s debt to less than 30% of GDP as at the end of 2006. The fiscal space that was created as a result has been dissipated rather quickly and the country has now cemented its place in the High Risk Debt Distress category.
With debt servicing absorbing more than 45% of tax revenue (Ghana being a record holder in SSA) and crowding out priority spending, whilst the country is saddled with deteriorating infrastructure (in the face of limited or non-existent fiscal space), unbalanced growth and negative out gap (reflecting lack of capital spending to boost growth from the non-oil real sector of the economy), the need to re-examine the country’s debt dynamics has become imperatively necessary.
The lecture will highlight how the just ended IMF program failed to deliver on debt Sustainability for the country. It will also provide a historical perspective to the debt dynamics, how the rebasing of the economy in 2009 and the recent one provided false hope and perhaps a trap that points to the next (17th) IMF supported program as the 2020 elections approaches with all its ramifications (fiscal slippages etc). It will also offer practical (not politically expedient.) solutions and highlight the political cost of implementing these solutions.
Details of the lecture are as follows:
Presenter: Professor Godfred A. Bokpin*
Date: Thursday, 20th June 2019
Time: 9:00am – 12:30
Venue: Coconut Grove Regency Hotel
Please confirm attendance by replying to this email or emailing firstname.lastname@example.org or contact us on 0554309966, 0577958144. We trust you or your able representative will honour this invitation.
President, IMANI Africa.
*The Presenter is an Economist and Professor of Finance with University of Ghana and is a non-resident fellow with IMANI Africa. He holds a first class first degree in Accounting, Master of Philosophy in Finance and PhD in Economics.