A political risk analyst, Dr. Theo Acheampong, has stated that the earliest government can return to the international capital market is three years.
According to him, what government needs to focus on now, is how to restructure the country’s debt.
Speaking in an interview on TV3’s Ghana Tonight on Wednesday, May 24, 2023, Dr Acheampong said, “we are not in a position now, as a country to even go to the market. And I dare say that nobody in that market. None of the people we owe currently will be in a position to give us money even if we go…from where I sit, we cannot go to the market at least for the next three years.”
It would be recalled that President Akufo-Addo granted an interview at the Qatar-Africa Economic Forum in Doha earlier on Wednesday.
In an answer to a question on whether government intends to return to the international capital market, President Akufo-Addo said, “we have positioned ourselves to be able to go back to the International capital market which had been a source of funding for us during the first three or four years of our government…there is no rush, but obviously why not take advantage of global savings, it makes a lot of sense to me. We will try as much as possible to maintain the discipline which is required and the most important requisite for a successful programme.”’
READ ALSO: Domestic Debt Exchange: Ken Ofori-Atta opens up on second round of programme
However, Dr. Acheampong thinks otherwise. He says “it is a non-starter for me. For the President to have intimated that, for me tells me that they are thinking about going back to borrow if the conditions improve. But at the moment, we only just signed the IMF programme and the biggest challenge ahead of us is to restructure our external debt –The very people that we want to go back and borrow more from– The international capital market.”
He suggested that what government needs to do is to “rebuild the finances of this country, raise domestic revenue sources to finance some of the development projects and importantly, cut back on expenditure. If we do these three things, we don’t necessarily have to go to the market.”
“I am a bit concerned that without us having even started that process of restructuring, how it would look like, what sort of concessions we will get from our creditors anyway, we seem to already be signaling that we want to go to the market to borrow again if the situation improves. That for me is quite worrying for a country that is in the midst of a debt crisis and whose debt has been classified as being unsustainable, gives me cause to worry,” he indicated.
Dr. Acheampong emphasised that the President jumped the gun, as there is so much left to be done in order to put the country in a good stead for a return to the international capital market.
“We’ve got over 13 billion dollars of Eurobonds on our books, we’ve got another 6 billion of both Paris and non-Paris Club debt on our books, all of which have to be restructured. Other than that, you don’t meet your financing that is required for this year and next year. If you look at the document, almost 60% of what we need to close our financing gap for this year alone, needs to come from the restructuring of our external debt,” he said.
