Gov’t’s upbeat view following successful debt restructuring misplaced – Fmr. Finance Chief Terkper
Former Finance Chief Seth Terkper has expressed concerns over the government’s optimistic outlook on its external debt restructuring achievements, describing it as misplaced.
While the government has touted significant progress in the restructuring process, Mr Terkper warns that the country’s economic challenges are far from resolved.
Speaking during a media dialogue on Ghana’s IMF Programme and Debt Restructuring on Thursday, the former Finance Chief highlighted that the government is still at the committee stage of its external debt restructuring efforts, which include commercial and bilateral (official) debts.
Further emphasizing that the deferral of debt should not be confused with improved cash flow.
“The government’s upbeat view about its successful external debt restructuring is misplaced, the deferral of debt is not the same as ‘cash flow’,” Mr Terkper stated,
He also noted that ongoing consultations with individual creditors are necessary and that the program’s approval, along with the first and second reviews, have relied on the benevolence of creditor waivers.
Adding that, despite the disbursement of $1.2 billion from the IMF, significant economic improvement remains elusive, as reflected in various fiscal, financial, monetary, and macroeconomic indicators.
He further pointed out that Ghana’s path to accessing domestic and external financial markets remains obstructed, forcing the country to rely on Treasury Bills and short-term notes to finance its budget.
The former Finance Chief further criticized the government’s approach to debt restructuring, asserting that it burdens future governments and generations with the “heavy lifting,” while current reserves and buffers are depleted.
“The debt restructuring outcomes confirm that the government is leaving the heavy lifting to successor governments and generations whose reserves and buffers are depleted,” he remarked.
Mr Terkper’s assertions during the dialogue called for a more cautious and realistic assessment of Ghana’s debt restructuring process and its implications for the country’s economic future.
