By: William Owusu Boateng
The Centre for Social Justice, CSJ, has welcomed government’s decision to commence formal engagements with the IMF to restore market confidence and help the country surmount current debt challenges.
CSJ urged government to demonstrate a thorough understanding of the country’s existing debt, proactively approach the IMF with a realistic programme and be willing to have a broader debt restructuring conversation with all current major creditors.
This was contained in a statement by the Centre as a precursor to its launch of a 20-year review of Ghana’s Debt profile.
The Centre noted that the extent of engagement with the IMF could lead to further expenditure rationalization, which could potentially reduce aggregate demand and temporarily slow economic growth.
To this end, government should make the necessary effort to cushion the effects of any such expense rationalization on the marginalized and economically disadvantaged groups.
The statement further called for a new financing framework that ensures debt sustainability to put the country on the path of steady progress towards attaining the Sustainable Development Goals and boost resilience against future shocks.
According to CSJ, the country’s debt situation requires a renewed focus on sustainability and policies or projects that can generate economic activity that will not only support but curtail the existing debt.
