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Economist, Dr Adu Owusu Sarkodie, has stated that a debt cancellation for Ghana will not affect the country’s ability to borrow from the international capital or Eurobond market in the near future.
According to him, international creditors were aware of the current global challenges facing developing countries.
Some financial observers have warned that a debt cancellation for Ghana could send negative signals to international creditors, indicating that the country was always unable to pay its debts.
The warning follows a report stating that Ghana was set to request a debt relief via the G20 Common Framework programme.
Speaking to Joy Business, Dr Sarkodie said debt forgiveness would demonstrate that creditors were ready to give the country a fresh start.
“Ghana owes about $13.1 billion on the Eurobond market alone. So if the debt release programme is successful, it means it will send a good signal to us.”
He argued that a debt cancellation will also improve the country’s credit rating since Ghana will no longer have unsustainable debts on its books.
“The reason why we are being downgraded is because we have unsustainable debt and can’t service those debts. Once they’re off, it gives us a fresh start. In any case, we have been downgraded because we owe, so if there is no debt, you will not suffer any downgrade.”
Dr Sarkodie also stated that the introduction of the Debt Release Programme by the International Monetary Fund (IMF) could cause the debt to GDP ratio to fall and help Ghana attain sustainability.
“If the Debt Release Programme comes, the Debt to GDP Ratio will fall to a sustainable level that we are all looking for. That is, about 55 per cent, and it will also give the government of Ghana some sustainability when it comes to the Debt to GDP Ratio,” he said.
