The Dean of the University of Cape Coast’s Business School, Professor John Gatsi, has called on the government to open up to discussions surrounding debt restructuring as a means of alleviating the economic downturn the country is facing.

According to him, the government is failing to appreciate the fact that the country is sinking in debt and therefore a debt restructuring would be a viable solution.

He noted that the earlier the government opens up to discussions on debt negotiations, the faster the economy will be rescued.

Speaking on JoyNews’ PM Express, he said, “I think the psyche of the government does not appreciate that we are deeply rooted in debt problems and we may not be talking only about balance of payment support but also about debt restructuring, and it seems to me that government is averse to debt restructuring and the faster government opens to that aspect of the discussion the earlier the economy will be redeemed.”

His comment follows the Central Bank’s decision to increase the policy rate by 300 basis points to 22%, after an Emergency Monetary Policy Committee meeting on August 17, 2022.

The move is part of measures to address the risks to the inflation outlook after the Cedi has lost more than GH¢3.30 of its value to the dollar in less than 8 months.

However, cost of borrowing is expected to go up significantly, and consequently increase cost of living and doing business.

According to Prof. Gatsi, “Everybody recognizes that the IMF is the only way forward because we don’t have the credibility,” however, till the government opens up for discussions, and fast tracks the IMF negotiations, tougher times will befall the country.

“All depends on the government of Ghana, the faster the government moves to accept other things being indicated by the data and open up, the better it will be for the economy. So right now everything depends on the government so they need to hurry up, open up for the negotiation to be fast tracked,” he said.