Ghana should declare bankruptcy – Prof Lord Mensah
A senior lecturer at the University of Ghana Business School (UGBS), Professor Lord Mensah, has suggested that Ghana considers declaring itself bankrupt to better position itself for grants. Speaking on NorvanReports’ Twitter Space Conversation themed “The Current Economic Crisis: Is there Any Silver Lining; What is Ghana Missing?”, Prof Mensah said that declaring bankruptcy and reverting to a lower income country would be a more viable option for Ghana than continuously bearing the costs of economic transformation through multilateral institutions like the IMF.
According to the professor, Ghana would be better off if it allowed the country to go bankrupt. He urged the government to weigh the costs of undergoing economic transformation against declaring bankruptcy and the potential benefits it could bring. He added that although going bankrupt would mean falling back to a lower income country, it would position Ghana for grants and concessional loans, which is better than holding onto economic transformation through the IMF and piling up debts every now and then.
“Looking at the numbers, we would be better off if we allow the country to bankrupt. We should look at the costs of economic transformation and the cost of bankruptcy and the benefits we may gain if we go bankrupt. Yes, going bankrupt will mean falling back to a lower income country, but we will get grants and concessional loans, and that is better than holding onto economic transformation through the IMF and compiling debts every now and then which has now become a cycle. Because of economic transformation which we want, see how the cedi has depreciated against the dollar simply because we are waiting for an IMF programme,” he said.
The professor’s suggestion could be a viable option for Ghana, given the country’s current economic challenges and the need for financial relief. The rising public debt, which has become a source of concern for many stakeholders, has also added to the urgency of finding a sustainable solution to Ghana’s economic woes. However, possible repercussions of declaring bankruptcy as a country exists and must also be looked at before a decision of that nature is made.
The IMF’s recent approval of a $1.1 billion funding package for Ghana has brought some relief to the government, but it has been urged to focus on implementing sustainable policies to address the country’s economic challenges. Despite this, the government has been criticized for its lack of a clear economic policy, with many arguing that the country needs a long-term plan to address the root causes of its economic challenges.
The proposal to declare bankruptcy has brought to the fore the issue of economic transformation, which has been a priority for the government. The government has embarked on several economic transformation programs, such as the Ghana Beyond Aid agenda and the Economic Transformation Agenda, aimed at achieving sustainable economic growth and development. However, the country’s economic challenges have persisted, leading some to question the effectiveness of these programs.
The debate on whether Ghana should declare bankruptcy or not has highlighted the need for a comprehensive economic policy that addresses the country’s challenges in a sustainable manner. The country’s public debt, which currently stands at over 100% of GDP, is a major concern, and the government needs to find a way to address this issue while also promoting economic growth.
The government must consider all options and develop a comprehensive economic policy that addresses the country’s challenges in a sustainable manner. Only then can Ghana achieve its goal of economic transformation and sustainable growth.
