Professor Peter Quartey, the Director of the Institute of Statistical, Social and Financial Analysis (ISSER) on the College of Ghana, has cautioned the federal government towards a right away return to the capital marketplace for loans.
He urged the federal government to concentrate on multilateral financing and to be extra aggressive in growing home income mobilisation to assist the counattempt’s improvement goals.
Prof. Quartey, a Development Economist, gave the warning throughout his inaugural lecture as a Fellow of the Ghana Academy of Arts and Sciences in Accra on Thursday.
The lecture was on the subject: “Debt, funding, and development in Ghana: Did we borrow to eat?” It addressed key points round Ghana’s debt and improvement financing.
It was attended by economic and monetary professionals, business gamers, policymakers, and college students from a number of Senior Excessive Faculties.
Dr Cassiel Ato Baah Forson, the Finance Minister, introduced final Tuesday, through the 2025 budget presentation that the government would cautiously reopen the home bond market.
Nevertheless, Prof. Quartey warned that loans from the capital market had confirmed to be expensive and unsustainable for Ghana’s improvement financing.
He urged the federal government to restrict its reliance on such loans.
Ghana’s debt stood at 42.9 per cent in 2013, beneath the International Financial Fund’s (IMF) debt sustainability threshold of fifty per cent debt to Gross Home Product (GDP).
Since then, the debt has been rising, reaching a file excessive of 82.9 per cent in 2023, earlier than decreasing to about 76 per cent in 2024.
“Why the frenzy to go to the capital market?” Prof. Quartey questioned, noting that borrowing from the capital market with out investing these funds in productive ventures had led to unsustainin a position debt.
“[The capital market] is the place we went to, and we’re having these issues. And you continue to wish to shortly end giving folks a haircut and go to the capital market… I wish to sound this warning! Borrow much less from the capital market and at cheap rates of interest,” he emphasised.
Prof. Quartey cautions that when borrowing, notably from Eurobonds and different capital market funds, which he described as too costly and unsustainin a position.
“We should draw back from them. Allow us to get extra multilateral and home sources of funding. They’re cheaper,” he emphasised.
He lamented the behavior of successive governments borrowing at excessive charges from the capital market and utilizing a good portion of these funds for public sector salaries and curiosity funds, notably since 2015.
Emerita Prof. Takyiwaa Manuh, Vice President of the Arts Part of the Ghana Academy of Arts and Sciences, additionally expressed concern concerning the nation’s debt scenario
She stated, “The debtor should eat, however the debtor should be cautious of what they eat.”
Prof. Manuh expressed confidence that Prof. Quartey’s lecture would spark additional discussions to assist enhance the nation’s funds.
She known as on policymakers to think about and implement coverage proposals from academia in an effort to enhance the dwelling circumstances of the folks. Myjoyonline
