Akufo-Addo’s government has stopped paying external debt; they want to push it on next NDC administration – Ricketts-Hagan

A former Deputy Minister of Finance and Member of Parliament for Cape Coast South, George Kweku Ricketts-Hagan has alleged that Akufo-Addo’s government has decided not to settle the country’s external debt.

According to Mr Ricketts-Hagan, the plan is to dilly-dally in order to handover to the next government, which he believes will be that of the National Democratic Congress (NDC).

The NDC MP said this while contributing to discussions on the impact of the depreciating cedi on cost of doing business in the country on TV3’s Key Points, May 18, 2024.

“…this is all happening at a time when we are not paying our external debt. We are negotiating that external debt and there is a deliberate attempt by this government not to complete that.

Because if we do complete that, we will have to start paying and once we start paying the dollar situation will get worse. So, if we are able to complete this transaction, it will not be good for Ghana.

The negotiation on the table is a bad one. They are trying to get a relief of about $10b and that is what they are focusing on. That is about a third of our debt.

So, what they want to do is push this, hoping that NDC government will come to power and they will push this on the lap of the NDC. Because when we come, we will have no choice but to negotiate that external debt. We will have to start paying one day.

If it happens like that, maybe we will be able to have the trust to start a better negotiation than what is on the table,” he explained.

Mr Ricketts-Hagan also said Ghana’s economy needs a fiscal space of up to five years to turn around. This, he noted, can be achieved if the managers of the economy renegotiate the country’s external debt properly.

The National Democratic Congress’ MP opined that the International Monetary Fund’s (IMF) prescriptions will not resolve the country’s current economic woes.

“The problem of our currency now and of economy, is not about how much hair cut you get, but it is actually about how much space you get within the next three to five years. So, the proper solution is to renegotiate our debt by refinancing the whole international bond market and get a fresh start. A fresh loan that will give us a clean slate and structure a bond that will give us a three-year zero-coupon bond and start some amortisation that will be going up,” he explained.

Mr Ricketts-Hagan stressed that “What they have on the table, they have taken their barber shop there, going to do their usual hair cut which these guys are not buying. Because, these are seasoned negotiators. So, what they want to do is push this, hoping that NDC government will come to power, and they will push this on the lap of the NDC. Because when we come, we will have no choice but to negotiate that external debt. We will have to start paying one day.

If it happens like that, maybe we will be able to have the trust to start a better negotiation than what is on the table. Because the IMF is pushing us to do this negotiation without the IMF itself not understanding what is happening in the international capital market. IMF is good at helping you negotiate a multilateral and bilateral kind of a transaction. This is new. We’ve never done it before. So if we go with what IMF is telling us- negotiate and try and get some percentage cut off, that’s not what we need. We need is fiscal space to be able to build our economy.”