Albert Zeufack, Chief Economist for the African Region said via video-conferencing during the launch of the 17th edition of the Africa’s Pulse, a bi-annual publication on the African economy, that Ghana should adopt measures to improve domestic revenue mobilization, while holding down expenditure within projected limits to ensure debt sustainability.
With a debt to Gross Domestic Product (GDP) ratio of 69.8 percent, the West African cocoa, gold and oil exporter is among 18 African nations listed in the report to have high risk of debt distress.
“What is actually creating the issue in debt is the fact that countries have started going to the market to borrow. Countries have been issuing more Eurobonds; countries have been contracting more sovereign debts so governments have been increasing domestic debt and this is the picture and is different from the pre-HIPC (pre-debt relief) period,” the Chief Economist explained.
He added that prior to the debt forgiveness era, countries had accumulated debts through concessional borrowing, but now since the debt mix has higher volumes of commercial debts, debt forgiveness was a remote possibility.
Zeufack however lauded Ghana for the economic growth figure of 8.5 percent, and a reduction in fiscal deficit to about six percent and other improving macro-economic indicators.
However, like many other African countries, in Ghana, the official observed that the growth was mainly based on improving commodity prices on the world stage.
To sustain this, he urged that Ghana accelerate the process of value addition to its primary export products. To this end the official pledged the World Bank’s resolve to support Ghana and Cote d’Ivoire in their efforts to add value to their cocoa beans before export.
Mike Toman, Lead Economist on Climate Change in the Development Research Group and Manager of the Environment, Energy, and Agriculture team said Ghana being one of the few African countries with success in electrification was worthy of commendation.
He observed also that the country was taking the right decisions in diversification of the energy mix to include a lot more renewable energy.
An economist at the World Bank Ghana office, Kwabena Gyan-Kwakye said he expected the country’s economic growth numbers in this year to be lower than that of the previous year.
This he said was the projection as oil production was a major boost for economic growth during the year before.
“If you look at the current fields being exploited now, oil production is going to go down. So in a sense much more has to be done to the non-oil sector to sustain the growth that we are in,” Kwakye urged.