Member of Parliament for Ajumako Enyam Essiam Constituency and Minority Ranking Member on the Finance Committee of Parliament, Dr Cassiel Ato Forson, has cautioned that Ghana could fail to meet its debt service obligations if urgent steps are not taken to seek debt relief from its lenders.
The Finance and Accounting expert was speaking at a Policy Dialogue held at the University of Professional Studies, Accra.
The current debt profile of the country, he said, is unsustainable and is putting severe pressure on the nation’s finances and making it difficult to meet debt service deadlines while meeting other expenditure commitments at the same time.
According to Dr Forson, available figures showed that up to 87% of government tax revenue went into debt servicing, which is the payment of interest and amortization alone leaving very little for investment in critical sectors of the economy.
This, he said, will worsen if the current borrowing situation continues into the foreseeable future.
“The Akufo-Addo/Bawumia government must seek urgent debt relief from the International Monetary Fund (IMF) through the newly proposed Debt Relief Initiative, known as the Common Framework for Debt Treatments Beyond the Debt Service Suspension Initiative (DSSI), which can be likened to the HIPC Initiative,” Dr Forson said at the event attended by a cross-section of Minority MPs and some Academics drawn from various Universities in the capital.
He added, “Failure by the Akufo-Addo/Bawumia government to do as recommended, within the next 18 months, would expose Ghana to a High Risk of Default on its debt service obligations, which will plunge the country into much deeper economic crisis”.
Responding to the issues raised at the Policy Dialogue, Deputy Finance Minister, John Kumah who was in attendance said the government has noted the concerns raised by the Minority and will announce comprehensive countermeasures in the Mid-Year Budget Review to be delivered by Finance Minister Ken Ofori Atta.
Source: MyPublisher24.com