Lecturer at the University of Ghana Business School, Prof. Laud Mensah, has maintained that Ghana is broke.
He responded to a question about his agreement with former President John Dramani Mahama’s claim that Ghana was broke.
A country that cannot repay its external debts and is involved in a domestic debt exchange program or debt exchange restructuring program is considered broke, he said.
During an interview with Nyankonton Mu Nsem on Rainbow Radio 87.5 FM, the economist stated that Ghana’s lack of access to the Eurobond market made it difficult to maintain stability. As a result, portfolio investors withdrew their investments, exacerbating the problem.
”Ghana is broke. There is no doubt about that. Ghana is a country with a struggling economy. But the advantage we have is that there is no war in Ghana, and there is also no natural disaster. We still have an asset base that can help us generate the needed resources. That is why the International Monetary Fund is not bothered or scared of giving us money.”
He underscored the need for the country to prioritise its expenditures and move businesses from the corridors of the government to individuals and other businesses.
“The reason I say we should move businesses from the corridors of the government to other businesses is that when you examine our structure, you will discover that only the government works and has the comfort to borrow in this economy. Because the rate is so high, everyone is investing in Treasury Bills. Young people with the means to invest in businesses are purchasing Treasury bills.”
He described the government’s posturing as troubling because it has failed to send any signal that we are in trouble.
He also expressed concern about the situation in which the government targets those who declare Ghana broke.
”I personally had problems advising Ghana to file for bankruptcy because we were having trouble paying our debts. As a broke country, you must prioritise your expenses and reduce unnecessary spending. Let us examine our situation; we are in an election year, and the government will engage in massive spending, although we are broke.”
Source: rainbowradioonline.com
