A coalition of local and international non-governmental organizations in governance in Ghana, is warning of a full-blown financial crisis if the continuous dependence on commodity exports is not immediately halted.
In a report released in October, the group warned that failure of lenders carrying the cost of any irresponsible lending to the country, could plunge the economy into further disarray.
“At the moment, all the costs of the crisis are being born by the people of Ghana, and none by the lenders. This is unfair. Lenders should carry their share of the cost of any irresponsible lending, and of the change in circumstance caused by the fall in commodity prices,” the report argues.
The 4-page executive summary further cautions government and lenders to ensure that loans are used well, and that more of the revenue generated is turned into government revenue by taxation.
It added that the country was getting too steeped into borrowing, adding that any country which borrowed too much money had lost control over its financial matters and also its destiny.
The civil society organizations that published the report include Integrated Social Development Centre Ghana, Jubilee Debt Campaign UK, SEND Ghana, VAZOBA Ghana, All-Afrikan Networking Community Link for International Development, Kilombo Ghana and Abibimman Foundation Ghana.
The group said its fears are based on tight financing conditions facing government as a result of challenges with revenue mobilization, a development that could result in some overruns as the electioneering campaign has reached its peak.
Ghana’s dependence on commodities dates back to colonialism. The borders of the country now known as Ghana were established by the British colonists in the late19th century. The Europeans had first started coming to the ‘Gold Coast’ in the late-15th century to open up alternative trade routes to the Sahara in order to access the region’s gold. The Portuguese, Dutch, British, Germans, Swedes and Danes all built or occupied castles and forts which were used as prisons for the slave trade.
The abolishing of the slave trade coincided with the industrial revolution, when European powers once again became more interested in Africa’s physical commodities – raw materials such as fossil fuels, metals and cash crops – rather than in forcibly shipping its people across the Atlantic; with the ‘scramble for Africa’ in the 19th century, the British extended their influence further inland, seeking direct control of gold and other resources.
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