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The French ambassador to Ghana, Anne-Sophie Ave, has said although “Ghana has all the ingredients to succeed”, the country’s high level of debt, has necessitated the need to resort to the International Monetary Fund, which she said is the “only international bank that has the means and whose job it is to bring loans and help restructure the debt and sanitise the financial situation, partly due to the Covid-19 and partly due to the tensions because of the war in Ukraine”.
As of March 2022, Ghana’s total debt stock stood at GHS391.9 billion.
Ms Ave told Blakk Rasta on Class91.3FM’s Taxi Drive show on Friday, 8 July 2022 that like Africa, the rest of the world has also had its fair share of economic turmoil brought about by the Covid-19 pandemic and the Russia-Ukraine war.
In her view, the government has a “real intention of attracting investment, supporting SMEs, supporting development by ensuring that the resources are actually benefitting the local growth and inclusive growth” but added, “nothing is done overnight and there is a general mindset of quick-wins” but “some investments take time and, so, it’s a long-term thing to suddenly take a country from a trader’s country to a producer’s country”.
“Sadly, when this policy was being implemented – and I believe that it’s not only this government because the previous government was also very strongly partnering with foreign countries and development partners – at the moment when we could have harvested the fruits of that and seen whether it was going the right way, Covid came and Covid has really damaged economies all over: in Europe, in Africa; and even if Africa has done roughly better in terms of the impact of the pandemic, the impact on the economy has been really tough”, she noted.
And then, she noted, “the war in Ukraine has suddenly raised tensions on the markets. For instance, wheat and some goods were heavily produced and imported from Ukraine and/or Russia” but “through the pandemic and through the war in Ukraine, we suddenly realise how reliant we are on each other; how dependent the globalisation has made us from the entire world and this, of course, is resulting in huge inflation everywhere in the world – France, Europe, everywhere – the prices are going over the roof; the prices of oil, the prices of transport and because we are importing and exporting, we rely on maritime transport and maritime transport is 90 per cent of the trade and the rates have, in some cases, been multiplied by 4, so, of course, you can see it on the products on the shelves and the whole world is currently experiencing a terrible inflation, something that we have not experienced in that way for a long time”.
Ghana, she observed, “also has inflation but you still have a growth rate”.
“In Europe, we are experiencing a situation where the growth rate is close to flat yet inflation is going up, so, it’s a much trickier situation”, Ms Ave said.
Ghana recently opened bailout talks with the IMF on the orders of President Nana Akufo-Addo.
Ms Ave reiterated that the Fund is the only international bank that can offer Ghana that kind of help.
“The other development partners, none of us has the shoulders to restructure and lend the billions that are necessary to carry on public policies: to build roads, hospitals and to get the country moving on because it’s a vicious circle … so you need to keep the country moving on and maintain what exists and carry on, build infrastructure and, therefore, you need money, so, it’s important that this level of debt can be addressed and only the IMF, which is, again, an international bank, can lend and support”.
