A Professor of Finance at the University of Ghana Business School, Godfred Bokpin, has highlighted the critical need for Ghana to adopt a long-term fiscal sustainability plan since the country’s bilateral creditors have agreed to extend loan repayment.
According to him, although the delayed loan repayment does not absolve Ghana of its debt obligations, it is the temporary fiscal relief needed.
“Ghana needs to have a long-term plan in terms of a fiscal sustainability path and have more discipline because, at the end of the day, we’re going to pay the debt; it is not like it has been canceled,” he said on JoyNews’ PM Express.
Drawing parallels with the debt relief initiatives in 2004 through the Highly Indebted Poor Countries (HIPC) program and the Multilateral Debt Initiative in 2006, Professor Bokpin urged authorities to reflect on the significant time that has elapsed since those initiatives and the current scenario.
He noted that despite past debt relief efforts, Ghana finds itself grappling with similar challenges today.
“The fact that we’re not paying our external debt now means that funds will be available to us. How do we spend it? What will be the level of efficiency? And we should all be interested,” he told host Evans Mensah on Tuesday.
He stressed the importance of judiciously utilising the resources made available through the loan repayment delay.
Ghana’s bilateral creditors recently agreed to postpone loan repayments by an additional four years, providing a temporary respite for the nation.
However, Professor Bokpin’s noted that this respite should not lead to complacency but rather be viewed as and opportunity for the country to implement effective, sustainable fiscal policies.
Source: JoyOnline