Government has been advised to go in for the Debt Service Suspension Initiative to give the country some relief in repaying its bilateral and multilateral loans.
Presently, about 30 Sub Saharan African nations including Kenya, Ivory Coast and Ethiopia are on the programme giving them some temporary suspension of debt-service payments owed to their official creditors.
The DSSI is a policy that allows bilateral and multilateral creditors, in a limited period, suspend debt service payments from developing and lower middle income countries.
Economist, Dr. Saed Boakye who is with the Institute of Fiscal Studies told Joy Business that government has no option to apply for the DSSI to reduce the fiscal pressure on the economy..
“We at IFS have recommended the DSSI so that it will give the government of Ghana some short term relief. And we recommend that the government as quickly as much as possible must get the country some short term relief so that it can have the room to plan ahead. So the government should definitely go for it.”
“If it had not been borrowing to service the debt that would have been a problem long time. You may not see the difficulty now except the financial sector begins to punish the country”, he further said.
Ghana’s public debt stock hit ¢273.8 billion, about 71% of Gross Domestic Product in September 2020, according to the November 2020 Summary of Financial and Economic Data by the Bank of Ghana.
This was equivalent to $48 billion and meant each Ghanaian will be required to pay a little over 9,000 cedis if the debt is shared among 30 million people.
Between July and September 2020, the nation added ¢10.7 billion to its public debt stock.