Dr. Ernest Addison
Governor of the Bank of Ghana, Dr. Ernest Addison, has appealed to the International Monetary Fund (IMF) to provide stronger financial support to Africa, to prevent the region’s debt levels from spiraling out of control.
According to him, African economies have accumulated debt at a rapid pace over the past decade to help address developmental and infrastructural needs.
“Consequently, the continent’s debt structures have become more sophisticated, including bonds, loans, collateralized debt contracts and repurchase agreements, and the creditor base has become more diverse and fragmented,” he said.
The BOG Governor further noted, “If unaddressed, the overall debt situation is expected to worsen in 2023 and further constrain the capacity for many member countries to raise the needed funding to deliver broader social protections and respond to climate change.”
Dr. Addison, was speaking at the 2023 Africa Consultative Group Meeting with the International Monetary Fund (IMF) Boss, Kristalina Georgieva, in Washington D.C, USA.
He said African countries remained committed to pursuing credible fiscal consolidation, anchored on efficient expenditure rationalization and robust domestic revenue mobilisation measures.
He continued, “It is, however, clear that domestic policy efforts alone are inadequate to sustainably address the debt burden and restore macroeconomic stability in the continent.
“Going forward, Madam Managing Director, the global policy dialogue should focus on Africa’s debt sustainability, long-term investment needs, macroeconomic resilience to shocks, and laying the foundation for the continent’s inclusive and job-rich growth,” he stressed.
He also suggested to the IMF to improve its lending framework to enhance the continent’s access to fund resources since that is macro-critical in this challenging environment.
“Finally, the Fund should continue tailored capacity development and surveillance support, in conjunction with other international partners, which are indispensable in the continent’s reform agenda towards addressing debt challenges and creating fiscal space to tackle long-standing snags to sustained economic growth and development in member countries,” he noted.
By Samuel Boadi