Coronavirus: Ofori-Atta’s debt relief call from China is justified – Economist

An Economist, Prof. Godfred Bopkin says the call by Finance Minister, Ken Ofori-Atta urging for a debt relief package from China to ease the economic burden on Africa post the Coronavirus pandemic is well accommodated.

This follows a video interview with Masood Ahmed, President of the Center for Global Development and Finance Minister, Ken Ofori-Atta on Monday, April 6.

“My feeling is that China has to come on stronger. Africa’s debt to China is US$145 billion or so with over US$8 billion of payments required this year so that needs to be critically looked at.” Ofori-Atta earlier indicated.

However, Prof. Bokpin in an interview with GhanaWeb said; “I think the call by the Finance Minister from my point of view is that China is becoming a global leader whether we like it or not and they are a force to be reckoned with today. So, it’s important that we get China to understand the dynamics and participate in those debt relief discussions and commit itself for the future of the common good.”

“In the time past we could do without them [China] but in the global geopolitics space today, China is a big player in the role of the UN Human Rights. Their currency is accepted into the Special Drawing Right (SDR) of the IMF,” he added.

He explains that Africa’s trade regime with China has a longer life span than some Western countries.

“The Trade Corridor between China and Africa is very huge and if you look at China’s involvement in the infrastructure space in Africa, it is also very huge and I think they need to come on board.” Prof. Bopkin advised that Africa, particularly Ghana, ought to desist from asking for free things from China in order not to pay a heavy price later.

“I think we also have to do away with asking for free things and ask for pure commercial transactions that are based on fairness, transparency, disclosure, pricing and that’s what we need because where we find ourselves right now, any call about debt relief for some low-income countries in Africa is justified,” he said.

In the wake of the Coronavirus pandemic, African governments are calling for several financial assistance, including calls for a suspension on all external debt and debt write-offs.