By Julian Owusu-Abedi
The former Finance Minister Mr. Seth E.Terkper yesterday held a press conference to react to the Bretton Woods’ intent to review Ghana’s classification as a high risk debt distress country by middle of next year to determine whether or not Ghana is a Developing Country or a Middle Income Country.
This position was contained in an interview granted by the World Bank’s Country Director on Joy Fm yesterday.
Currently Ghana’s debt stock to the GDP stands at 71% which already makes Ghana a high risk debt distress country amongst some 27 other Countries.
But, Mr Seth Terkper is of the opinion that there’s no ambiguity about the fact that Ghana is already a Middle Income Country (MIC) because himself as the Finance Minister then received the formal letter from these Bretton Woods Institutions indicating that Ghana is a MIC at the time when Ghana had just one Oil Field and had done rebasing at 60% with services starting to pick up.
He said, now that Ghana has three Oil Fields and even expecting one more, no statistics can now determine or point to the fact that Ghana is not a MIC and therefore Ghanaians shouldn’t display any signs of ambivalence on it’s part and rather be proud and accept the fact that “we are a MIC and work to sustain it after all, Vision 2020 which was later advanced to Vision 2015 had the objective of making Ghana a MIC”.
Mr. Terkper stated that there is prestige that comes with being a MIC which means “we have to work hard to retain that status in order that we can be classified as emerging economy by simply finding solutions to what is required which is that you manage your debt well, you borrow reasonably because when you are a MIC you have a mechanism to pay your debt so that you can borrow again to do your investments. This also gives you room to finance your recurrent expenditure from your budget.”
The former Finance Minister stressed that “we should accept that we are a MIC and set that as an agenda and not to accept the ambivalence as whether we are MIC or a Developing Country.
“In any case, the Bretton Woods should rather tell us why there is no blueprint for becoming a MIC which is what African MICs deserve” so that ratings can’t be done at any institution’s whimsies and caprices, he added
Meanwhile, managers of the Ghanaian economy have also noted that despite the spike in the country’s debt stock – which they posit is mainly due to the Covid-19 pandemic and exceptional costs incurred in the financial and energy sectors – they are hopeful that with their new economic programmes, the economy will see an expansion and will help improve the economy before the IMF and World Bank conducts its debt sustainability assessment next year.
