Ghana Politics

Ghana debt-distressed – Mahama

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Former President John Dramani Mahama has described Africa’s over-dependence on imported goods as shameful.

According to him, intra-African trade must be encouraged on the continent to boost trade and promote self-reliance.

Speaking at the 24th African Business Conference organised by the Harvard Business School, Mr Mahama said: “We must push for self-reliance for key strategic commodities and supplies such as rice, tomatoes, onions, and vegetable oil for which we have comparative advantage”.

“It is such a shame that Africa continues to import these commodities when we have favourable conditions to produce them.”

”Africa must take greater control of the trade and processing of its natural resources like cocoa, and the minerals and build stronger capacity to respond to global energy shocks stemming out of situations such as the Russia-Ukraine conflict.”

Mr Mahama also advocated the reintroduction of the Debt Service Suspension Initiative (DSSI) to help Africa deal with its rising public debts.

“Many African countries, including Ghana, have reached debt-distress levels with debt-to-GDP ratio ranging between 70% and 80%.”

“I am advocating a reconstitution of the Debt Service Suspension Initiative to offer our countries some fiscal space to make investments in critical states such as education and health.”

Most African countries have been hard hit by the Russia-Ukraine war as it has reduced Russian and Ukrainian exports of crucial commodities such as wheat, sunflower oil, and corn.

It has also affected the cost of fuel, prices of fertiliser, and other key agricultural inputs.

Most of these countries, including Ghana lament that the war is directly affecting their agricultural value chain.

In March this year, the World Bank said even though COVID-19 did not helped Ghana’s economic standing, the situation started getting bad before than pandemic hit.

Speaking at the 65th Independence Day Lecture held at the Economics Department of the University of Ghana, Legon, on Monday, March 7, 2022, on the ‘state of the nation’s economy and politics, 65 years after independence, the path to sustainable development and democratic consolidation’, the World Bank Country Director for Ghana, Mr Pierre Laporte, said Ghana’s economic situation is very serious.

“Is it a really serious situation? Well, the numbers speak for themselves”, he noted, emphasising: “The situation is very serious”.

“At the World Bank, we’ve not hidden the fact when we’ve held discussions with government officials and even the head of state that Ghana faces a very tough road ahead to restore macro sustainability,” Mr Laporte noted.

In his view, although COVID-19 takes some of the blame for the current situation, the signs were on the wall way before the pandemic started.

“Yes, COVID-19 has not helped but even before COVID-19, there were signs that the situation was getting a little bit challenging”, he noted.

“So, the key thing is to be transparent with the people”, he advised.

“Yes, the figures speak for themselves but not everybody is as educated as we are”, Mr Laporte pointed out.

“Not everyone understands what the numbers mean, so, it is important to talk about it like we are doing”, he noted.

“More important is for us to find solutions for the problem,” he added.

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