AFRODAD in collaboration with Grassroots Africa hosted various CSOs, representatives from the Ghana’s government, economic bodies, development partners,
and national private sector on the 4th July 2019 in Accra, Ghana.
The main aim of the meeting was to discuss debt management and borrowing by African States and to allow mutual learning and knowledge exchanges among debt management stakeholders. The meeting ran under the theme: “Interrogating Ghana’s Debt Management Strategy: Lessons for West African States.” The forum was also an effort to highlight the need to reduce borrowing from external sources and to ensure that debt management processes are transparent and accountable to avoid unsustainable debt situations.
AFRODAD’s position, as clearly highlighted in the African Borrowing Charter, is that African governments should always avoid incidences of over-borrowing in order to protect the continent from unsustainable and at times unsafe public debt contraction. Governments are charged with the responsibility to avoid risks of possible deterioration of fiscal positions thus negatively affecting living standards of African citizens.
“There is need to sustainably balance public debt levels with the necessity to accelerate inclusive development and enhance public service delivery in Africa”. Mr. Tirivangani Mutazu, Senior Policy Analyst from AFRODAD, emphasized as he also mentioned that over 15% of African countries were already in debt distress while about 28% others were experiencing high risk of debt distress.
Member of Parliament (MP) for Bolgatanga Central constituency in Ghana, Mr Isaac Adongo, urged the government of Ghana and other African States to consider the concept and realisation of domestic borrowing instead of foreign borrowing. “ we need to develop the local capacity to fund government programmes rather than letting a country borrow from external sources because if you borrow in dollars, you need to pay in dollars and that puts a strain on government’s ability to offer adequate public service to its people.
To sum it up, Mr Mutazu urged Ghana to continue improving its debts strategies, fix its financial sector fragilities and implement the fiscal responsibility law that was recently passed by Parliament stating that public debt should be kept below the established threshold of 65% of Gross Domestic Product. Here is an interesting reaction that goes beyond passing laws.