Belinda Ayamgha/Julius K. Satsi
Accra, March 13, GNA - The Institute of Fiscal Studies (IFS) has called for the establishment of a Debt Audit Commission to examine Ghana's public debt with a view to bringing it to sustainable levels.
Professor Newman Kusi, the Executive Director of the IFS, who made the call, said the audit would look at how much had been borrowed and what the money had been used for.
He explained that an important factor in Ghana's rising debt was the use of debts secured to finance consumption instead of revenue generating projects that would help service the debt.
"Debt accumulation is unlikely to be sustainable if loans are used to finance public or private consumption, with no effect on long-term growth," he stated.
"We need to have a debt audit. The Debt Audit Commission will have all the information, go through and see what was borrowed and what it was used for," he said, adding that this would help in reviewing the country’s capacity for further borrowing.
The Debt Audit Commission, he said, should comprise both domestic and international experts, who would propose new accountability mechanisms for government and lenders to ensure loans contracted were used productively.
The IFS also recommended that government request the support of the United Nations Commission on Trade and Development to organise a debt conference with all its creditors to discuss and restructure Ghana's debt and agreeing on debt burden sharing and cancellation to bring its payments to sustainable levels.
This, he said, would be based on the UNCTAD's principles of co-responsibility of sovereign borrowing and lending, which was formulated in 2012 and specifies responsibility of both sovereign borrowers and lenders for the use of good Code of Conduct and institutional set-up in concluding debt transactions.
Prof. Kusi painted a gloomy picture of Ghana's public debt, which had risen from GHȼ4.92 billion in 2000 to GHȼ138.9 billion as at September 2017. This is an increase of GHȼ133.9 billion between 2006 and September 2017.
He said if the ESLA Plc bond of GHȼ4.7 billion issued in October 2017 and the sale of GHȼ5.3 billion long-term bonds at the end of November 2017 were added it would bring the total to about GHȼ146.2 billion.