Ghana’s economic struggles have been a subject of intense debate, with financial experts weighing in on the severity of the country’s fiscal predicament.
In an interview on The KeyPoints with Alfred Ocansey, CEO of Dalex Finance, Joe Jackson, delivered a hard-hitting assessment of the Akufo-Addo administration’s handling of its debt crisis, painting a grim picture of the nation’s financial health.
“First of all, we unilaterally suspended all payments. When we suspended payments, it was because we could not pay.
“We were so broke, we raised up our hands and said we could not pay. And we went to the IMF for a bailout,” Jackson stated, emphasizing the dire financial situation that led to Ghana’s decision to default on debt obligations.
His remarks come against the backdrop of Ghana’s struggle to restructure its debt, a process that has seen the government negotiate with domestic and international creditors.
The debt crisis, which escalated in 2022, forced the government to halt payments on most of its external obligations, leading to tense negotiations with Eurobond holders. However, Jackson’s comments suggest that the government’s portrayal of these negotiations may not reflect the full reality of the situation.
“It’s not as if the bondholders came to us and said, we love you so much, we donate money to you. A gun was held to their heads,” he remarked, illustrating the pressure creditors faced in agreeing to Ghana’s debt restructuring terms.
Jackson further criticized the government’s handling of domestic debt, pointing out the significant sacrifices made by local investors.
The controversial Domestic Debt Exchange Programme (DDEP) led to losses for pensioners, banks, and other bondholders, sparking public outcry and protests.
“If you ask your domestic citizens to give up their money, it was the single biggest transfer of funds from the private sector to the government sector we’ve ever known in this country, or maybe even the whole of Africa,” he noted.
The government’s borrowing spree, according to Jackson, left the country in a fragile state, making it impossible to sustain its obligations without external support. He highlighted the reliance on deficit financing as a clear indicator of Ghana’s economic woes.
“If you take 55 billion in deficit financing and say that was required to keep us alive, are you not broke? You are broke,” he declared.
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