Professor Godfred Alufar Bokpin, an Economist, has asked the government to ensure that the GHS61 billion savings from the Domestic Debt Exchange Programme (DDEP) is put to productive use.
He said the government was expected to save GHS61 billion from the DDEP it carried out under the ongoing US$3 billion loan-support programme with the International Monetary Fund between 2023 and 2031.
The Economist said the money would give the government a “breathing fiscal space” and that it was important that intentional efforts were made to invest such amount in the growth of agriculture and agribusiness and manufacturing.
Prof Bokpin, also said that it was important for government to make the cost of doing business on those sectors very friendly.
He said this in an interview with the Ghana News Agency after a roundtable discussion on “Ghana’s debt restructuring programme thus far and the way forward”.
The event was organised by Tax Justice Coalition in collaboration with ActionAid Ghana, at the Maxlot Hotel in Accra on Tuesday, March 26.
Speaking with GNA, Prof Bokpin asked the government not to fail the individuals, financial institutions, and pensioners, who had sacrificed for the country to have the fiscal space created through the DDEP.
“Even though the government is counting it gains in terms of fiscal savings from the DDEP, which is over GHS61bn [from 2023 to 2031], that is cost to domestic creditors,” he said.
The government should ensure that the money saved from the DDEP is used productively to contribute to the country’s economic stability, as well as implement projects that would benefit Ghanaians, he stressed.
Prof Bokpin noted that in the past, the Heavily Independent Poor Countries (HIPC) initiative, and other debt reliefs programmes, had the country implement specific programmes and projects.
In the case of the DDEP, however, he said that had not been done, giving the government a leeway to spend the money realised though the DDEP the way it would want to do.
“Because we couldn’t come under a Domestic Creditors Committee to demand specific reforms in exchange for the haircut, the government has a fiscal space in excess of GHS61bn,” he said.
That, the Economist said would lead to the government engaging in several activities, especially during the election year, and cautioned against starting projects that would not be completed in the shortest time possible.
He also encouraged the government to double its efforts in completing external debt negotiations, because it was critical in ensuring that the country reached the debt sustainability expected by 2028.
Ghana has so far completed its domestic debt restructuring and secured assurances from its external bilateral creditors, awaiting a Memorandum of Understanding (MoU), and still in negotiation with its commercial creditors.
“The government must be flexible and do a lot more within to ensure that we deepen fiscal reforms. So that whatever gains we make will be able to complement what we must do here,” he urged.
