A senior lecturer and the head of finance department of the University of Ghana (UGBS), Prof. Godfred Bokpin has said that Ghana needs to grow its economy to sustain its debt.
He was speaking on the topic, Ghana’s Debt in perspective: What’s the way forward at the 3rd BTA Business Summit yesterday at the Coconut Glove Regency Hotel.
In an interview with GhanaWeb after the program, Prof. Bokpin argued that there is nothing wrong being in debt but the problem is the kind of investment made.
“There is nothing wrong with having debt, countries borrow and countries will continue to borrow but Ghana’s problem is how we have invested the borrowings, therefore, ” he said.
“If you don’t invest the money very well then you are going to have challenges to generate the much need money either in cedis or foreign currency to be able to service it” he added.
He also revealed that if the real GDP grows probability at a rate faster than the rate at which Ghana adds to its debt stock from the primary balance and debt interest payment then Ghana’s debt level will be stable.
He further maintained due to the external component of the public debt, export performance is important for the sustainability of Ghana’s debt. “If you owe dollars and you have to pay dollars then you need to generate dollars to pay; meaning your export performance is also important.
“If your exports are not doing well then it means that your generation capacity will be in cedis and your servicing obligation will be in dollars and it means that you have to convert cedis to dollars to pay and that itself is going to be very costly,” he explained.
Prof. Bokpin, therefore, admonished Government to spend wisely and at priority areas to sustain the debt. “Government must spend right and government must spend wisely and government must spend on priority areas” he advised.
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