Dr John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), has questioned whether Ghana needs capital markets to address its financial challenges.
According to him, the country does not require the capital market since, with the right leaders in place, it can create enough revenue from its natural riches.
“We have more than enough natural resource wealth,” Dr. Kwakye tweeted. We only need leaders who will use it for our benefit rather than hand it over to so-called foreign capitalists.
“We have trillions of dollars in natural resource wealth, but we’re begging Washington for $3 billion over three years.” ‘There must be something wrong with our thoughts,’ says Paul Kagame.
He was responding to the Finance Minister Ken Ofori-Atta’s assertion that it might take Ghana at least three or more years to access the global finance market.
Although this new development may appear to be a difficulty, Mr. Ofori-Atta explained that it actually gives the nation with a strong opportunity to realize its self-sufficiency program.
“In terms of returning to the international capital market, I believe it will take us two to three years, if not longer.” In the meanwhile, I believe we should be able to develop local resources to do so.
But, if you look at the Ghana Cares programme, it is our policy to be self-sufficient in poultry, rice, tomatoes, and so on, which we’ve begun to do so that will reduce your foreign exchange demands and hopefully begin to export those products,” Ken Ofori-Atta said during a press conference on the sidelines of the International Monetary Fund (IMF) Spring meeting in Washington DC.
It should be noted that Ghana’s governmental debt expanded dramatically during the COVID-19 pandemic.
As a result, credit ratings were downgraded, non-resident investors left the domestic bond market, and Ghana lost access to international capital markets.
Price and supply-chain shocks from Russia’s invasion of Ukraine exacerbated the effects, resulting in a huge exchange rate depreciation, a jump in inflation, and strain on foreign exchange reserves.
Faced with significant economic, financial, and social pressures, Ghana’s Ministry of Finance declared a moratorium on debt service payments under certain categories of its external debt, such as Eurobonds, on December 19, 2022.
Soon after, it restructured the vast majority of its domestic debt and applied for debt relief under the G20 Common Framework.
Source: 3news
