A former Vice President of the Bank of New York, USA, and former Minister for Energy, Boakye Agyarko, has proposed to the government of Ghana to seek debt cancellation as part of the efforts to address current economic issues.
Speaking on Accra-based Peace FM's political analysis programme, 'The Platform' on Monday, February 20, 2023, the finance expert boldly stated that the IMF Programme alone will not restore the Ghanaian economy.
He said, “ I think it will be in the best interest of the country to seek debt cancellation right after the IMF negotiations from the Parish club which deals with bilateral loans. The Domestic Debt Exchange Programme is not going to bring us to the 55% threshold in a span of 5 years. We, as a country, also cannot continue to cut expenditure to achieve the 55% threshold.
"It happens all the time, Senegal has sought debt cancellation from Parish club for the fifteenth time, Argentina is even worse. That is the next step we have to take, to seek debt cancellation. I have done four debt restructuring when I was with the Bank of New York. In my banking days, I saw a lot of these debt cancellations in Ecuador, Peru, and Argentina.”
The government of Ghana through the Ken Ofori Atta led-Finance ministry has been negotiating with the International Monetary Fund (IMF) over a $3 billion bailout loan among which a key conditionality includes domestic and external debt restructuring.
It was the view of Mr Boakye Agyarko, who has announced his intention to contest NPP Presidential Primaries, that it would take between seven and ten years to fully restore the economy so as to avoid the revolving door syndrome, where every three to years sees us going back to the IMF for a bailout.
He said, “with our current economic situation if someone tells you that it is going to take us 3 years to restore the economy then that person does not know what he or she is talking about. We seek IMF bailout every three to four years, we fail in the final year then we go back for another programme. What does it tell you? If we are to be careful and cautions of our expenditure and management of the economy, it is going to take us between seven to ten years to fully restore the economy.”
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Boakye Agyarko, Former Vice President of the Bank of New York -USA