Ghana now in a ‘debt iceberg’ – Franklin Cudjoe

Franklin Cudjoe has advised government on the economy

He said government should seek help from the IMF

He noted that the economy is in a "debt iceberg"

Franklin Cudjoe, President of IMANI Africa, has noted that the government of Ghana has now driven the country into what he calls a “debt iceberg”.

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Because of this, the political commentator indicated in a Facebook post sighted by GhanaWeb that, Ghanaians are sinking in the debt iceberg “with fewer lifeboats”.

Cudjoe’s post on his social media timeline was about Ghana’s debt profile and how government must take a second look at the country’s expenditure.

He further advised the handlers of the economy to ‘run’ to the IMF for help in order to contain the situation the country finds itself.

“We all fall on hard times and need some support from family and friends... but Government has driven the country into a debt iceberg and we are sinking with fewer lifeboats and passerby ships that should care are simply smiling and waving at us... We need to stop the debt clock by rationalising our expenditure plans and more... Meanwhile, government should talk to the IMF to help. We shouldn’t be shy at all,’’ Franklin Cudjoe’s post read.

Background

International rating agency, Fitch, has downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-‘ from ‘B’ with a negative outlook.

The downgrade of Ghana’s IDRs and Negative Outlook reflect the sovereign’s loss of access to international capital markets in the second half of 2021, following a pandemic-related [COVID-19] surge in government debt.

Fitch in a report said “this comes in the context of uncertainty about the government’s ability to stabilise debt and against a backdrop of tightening global financing conditions. In our view, Ghana’s ability to deliver on planned fiscal consolidation efforts could be hindered by the heavier reliance on domestic debt issuance with higher interest costs, in the context of an already exceptionally high-interest expenditure to revenue ratio.”

It pointed out that Ghana’s effective loss of market access to international bond markets increases risks to its ability to meet medium-term financing needs.