A banking consultant, Dr. Richmond Atuahene, has warned that Ghana is likely to require another debt restructuring within the next three years if fundamental economic reforms are not implemented.
Dr. Atuahene’s comments come in the wake of the Bank of Ghana’s commissioning of a new $250 million headquarters building amidst the ongoing debt restructuring process.
On Wednesday, November 20, the Bank of Ghana commissioned a new headquarters called the “Banking Square” in Accra, costing a substantial $250 million amidst the significant debt burden on Ghana.
This has fueled debate about the government’s priorities and its commitment to fiscal responsibility.
Speaking on Starr Today, Dr. Atuahene emphasized the need for comprehensive structural reforms to bolster Ghana’s economy, criticizing the government’s approach to taxation and its failure to implement crucial revenue-generating measures.
“We need comprehensive structural reforms to foster the economy. Anytime you talk about property tax, which is supposed to generate about 9 billion every year, they’ll go and put it on the E-levy, where a common person, a poor man, does. Anytime you talk about this, they downplay it,” Dr. Atuahene stated.
He highlighted the World Bank’s recommendation for Ghana to introduce property taxes as a crucial step towards addressing its debt issues.
He emphasized the significant potential revenue from such taxes.
“The World Bank is saying that for Ghana to come out of this debt issue, we need to put some taxes in, property tax. Accra alone is going to give us 5 billion; Kumasi will give us 3 billion and others, and that alone will mitigate the hardship that we’re going through at the moment. All these are not being done,” he explained.
Dr. Atuahene linked the lack of these crucial reforms to Ghana’s precarious financial situation and predicted another debt restructuring.
“So the debt overhang, if we don’t take these measures and put them right, Ghana is not going to recover. No one claims what he hasn’t got. Our total export – gold 1.2 billion, cocoa 1 billion – our total inflows cannot help us pay the debt, which is why we are going to restructure. And if we don’t take care, Ghana will go for another debt restructuring in the next three years because the inflows will not be able to meet the debt repayment,” he warned.
