Ghana’s debt cancellation request gains momentum, but conditions loom
Ghana’s request for debt cancellation has gained momentum, with the G20 countries agreeing to establish a creditor committee to work on the West African country’s debt cancellation request. However, a Senior Finance Lecturer at the University of Cape Coast, Seyram Kawor, has warned that Ghana should be prepared to meet strict debt cancellation conditions, particularly given its dealings with China.
China’s Role Poses Challenge
According to Mr. Kawor, Ghana’s dealings with China could pose a significant challenge in securing debt cancellation. While some ambassadors, particularly Germany, have expressed a willingness to help, it would be subject to conditions. He urged the government to be cautious about what they say to the creditor committee and cut down on expenditure before meeting the G20 countries.
Former Finance minister, Seth Terkper, also emphasized the need for Ghana to conclude a debt cancellation agreement with China to enable the country to secure a programme with the International Monetary Fund by the second quarter of this year. The high-powered government delegation is expected to visit China later this month to plead for debt cancellation after President Akufo-Addo appealed to the German government to help speak to the Asian economic giant for debt cancellation.
Debt Burden a Major Concern
The issue of Ghana’s debt has been a major concern for the country’s government, as it has had a significant impact on the economy. Ghana’s public debt reached 76.1% of GDP in 2021, and the government has been looking to restructure the country’s debt to reduce the burden.
Positive Developments, but Conditions Must Be Met
While the establishment of the creditor committee by the G20 is seen as a positive development, Ghana must be prepared to meet the strict conditions set by the committee. With China being Ghana’s largest creditor, it is crucial for the country to secure a debt cancellation agreement with the Asian economic giant to reduce its debt burden and secure a programme with the International Monetary Fund.
Ghana’s debt cancellation request has gained momentum, but the country must be prepared to meet the strict conditions set by the creditor committee. Given its dealings with China, Ghana must also work towards securing a debt cancellation agreement with the Asian economic giant to reduce its debt burden and secure a programme with the International Monetary Fund.
