“With the right commitment, Ghana can bring debt to sustainable level in 5-7 years”

Prof. Lord Mensah of the University of Ghana Business School has expressed confidence that Ghana’s national debt is highly sustainable, emphasizing the importance of government commitment in addressing the country’s financial challenges.

Speaking on ABC Midday News, Prof. Mensah noted that the key to achieving a sustainable debt level lies in a concerted effort from successive governments.

He stated, “The country’s debt is highly sustainable. The only difference is that we need to get the commitment of government upon government.”

He added that, with proper planning and focus, Ghana could reduce its debt to a sustainable level within the next five to seven years. This goal, according to Prof. Mensah, depends on how well the country accounts for its expenditure lines and mobilizes revenue.

Prof. Mensah also highlighted the importance of shifting Ghana’s economic structure from being government-driven to a more private sector-led economy.

“If we are able to produce, reorient the economy from a government-concentrated economic situation to a private-led economy, I think this will help solve our economic problems,” he concluded.

Background

Ghana is the second most indebted country to the International Monetary Fund in Africa in terms of Concessional Lending and Debt Relief Trust. The country’s exposure to the Fund stood at 2.242 billion Special Drawing Rights, an equivalent of $2.914 billion as of October 31, 2024.

The West Africa nation until recently was the most indebted country to the IMF. The country’s exposure represented 17% of the total Africa borrowings from the IMF. Democratic Republic of Congo came 1st with an indebtedness of $2.256 billion SDR to the IMF.

Zambia placed 3rd with an SDR of 1.272 billion indebtedness to the IMF. Ghana and Zambia have defaulted on their loans leading to seeking assistance from the IMF.

According to the Fund’s Quarterly Finances, the country’s outstanding concessional loans to the Bretton Wood institution were higher than what was recorded in July 2024.Ghana went to the IMF in January 2023 to seek economic assistance after its economy went through severe challenges.

The IMF in May 2023 approved a $3 billion bailout package to revive the Ghanaian economy. So far, the nation has received $1.92 from the Breton Woods institution under the Economic Credit Facility Programme.