Ghana’s $2.8 billion debt relief secured through the G20 Common Framework is a significant step toward fiscal recovery, but Economist Professor Godfred Bokpin is urging the government to adopt a long-term strategy to ensure sustainable economic stability beyond the current $3 billion International Monetary Fund (IMF)-supported program.
The agreement, endorsed by all 25 members of Ghana’s Official Creditor Committee, offers fiscal breathing space as the country works to implement recovery measures.
However, Professor Bokpin warns that fiscal vulnerabilities could resurface after the IMF program concludes unless proactive measures are taken.
“Anytime we are under an IMF-supported program, we tend to achieve macroeconomic stability, but right after the program, vulnerabilities begin to show up,” he said in an interview with Citi Business News.
He noted that nearly 90% of the external debt relief will be utilised during the IMF program, raising concerns about fiscal sustainability afterward.
The government is also seeking favorable terms for $2.7 billion owed to commercial creditors, but concerns persist about the resilience of Ghana’s economic framework post-IMF.
This is the time to begin to have a long-term plan for all of this,” Professor Bokpin emphasised, calling for structural reforms to anchor fiscal sustainability and minimise future economic shocks.
Comments