Lord Mensah accuses Ofori-Atta of paralyzing the economy by continually running a budget deficit.
Lord Mensah, a Professor at the University of Ghana Business School Lord Mensah, a professor at the University of Ghana Business School (UGBS), has urged the government to declare the country insolvent in order to better position itself for grants.
Prof. Mensah argues that Ghana would be better off declaring insolvency and reverting to a lower income country than continuing to bear the costs of economic transformation through multilateral institutions such as the IMF.
The senior lecturer remarked that Ghana would fare better if the government allowed the country to declare bankruptcy. He urged the government to consider the costs of undergoing economic transformation versus the potential benefits of declaring bankruptcy.
What Ghana's Bankruptcy Will Mean
Prof. Mensah added that although going insolvent would mean reverting to a lower income country, it would position Ghana for grants and concessional loans, which is preferable to maintaining economic transformation through the IMF and accumulating debts periodically.
"According to the statistics, we would be better off if the country declared bankruptcy. We should evaluate the costs of economic transformation, the costs of bankruptcy, and the potential benefits of declaring bankruptcy.
Yes, declaring bankruptcy will result in a return to a reduced income country, but we will receive grants and concessional loans, which is preferable to maintaining economic transformation through the IMF and accumulating debts periodically, which has become a cycle. Observe how the cedi has depreciated against the dollar due to our desire for economic transformation, merely because we are awaiting an IMF programme."
Lord Professor Mensah
In the meantime, given Ghana's current economic difficulties and need for financial relief, the professor's proposal could be a viable option. The rising public debt, which has become a source of concern for numerous stakeholders, has also increased the urgency of finding a long-term solution to Ghana's economic problems. However, there are potential consequences of a country declaring bankruptcy that must be considered prior to making a decision of this nature.
The recent approval of a $1.1 billion funding package for Ghana by the IMF has provided some relief to the government, but it has been urged to prioritize the implementation of sustainable policies to resolve the nation's economic challenges. Many argue that the country needs a long-term plan to address the fundamental causes of its economic challenges.
The proposal to declare bankruptcy has taken the issue of economic transformation to the forefront, which has been a government priority. The government has implemented a number of economic transformation programs, including the Ghana Beyond Aid agenda and the Economic Transformation Agenda, in an effort to achieve sustainable economic growth and development. However, the country's persistent economic difficulties have led some to doubt the efficacy of these programs.
The debate over whether Ghana should declare bankruptcy has emphasized the need for an all-encompassing economic policy that addresses the nation's challenges in a sustainable manner. The country's public debt, which currently exceeds 100 percent of GDP, is a major concern, and the government must find a method to address this problem while fostering economic expansion.
The government must consider all options and establish an all-encompassing economic policy to address the nation's challenges in a sustainable manner. Only then will Ghana be able to attain its economic transformation and sustainable growth objectives.
In the meantime, Lebanon, Sri Lanka, Russia, Suriname, and Zambia have already defaulted on their debt, Belarus is on the verge of default, and at least a dozen other nations are in the danger zone, as rising borrowing costs, inflation, and debt fuel fears of economic catastrophe.