Debt financing hurting our economy - Afriyie Akoto

A flagbearer hopeful of the New Patriotic Party (NPP), Dr. Owusu Afriyie Akoto has cautioned that Ghana's quest to achieve economic development must immediately shift from the overreliance on debt financing to more sustainable economic policies rooted in the development and diversification of home-grown policies.

He said the cause of the extreme hardship Ghanaians are experiencing at the moment is the result of the country's continuous reliance on external and internal borrowing which leaves them with nothing but compounded debt that always comes back to haunt the citizenry.

“We are all feeling the heat. In an economy of 40 percent inflation who isn’t feeling the heat? How does anybody survive? I have been truthful to the facts. The government has been truthful to the facts, and that is why we went to the International Monetary Fund (IMF) for a bailout”, he noted.

In an interview with Starr FM on Thursday, October 12, 2023, the former Minister of Food and Agriculture said the use of debt financing has never been good for Ghana, underscoring the need for a policy shift.

He noted that Ghana has it all in terms of the gift of natural resources but what the country lacks is a bold and courageous leadership that will take the initiative to implement homegrown policies embedded in its agricultural policy diversification to achieve the much needed economic independence.

“…financing our infrastructure, health, and education are all partly built on debt – both local and foreign. Since the HIPC of Kufuor’s time, we are talking about the situation where we have gone to the international bond market to raise money to support our development. And I am saying that strategy won’t work. Because we’ve tried it almost every four years and 17 times we’ve failed. So, we need to change our strategy”, he noted.

Worried about the high rate of Ghana's inflation, Dr. Akoto said such could be curbed when the country halts its overreliance on debt financing and begin implementing homegrown policies.

Ghana’s year-on-year inflation rate dropped from 40.1 percent in August 2023 to 38.1 percent in September 2023, according to the Government Statistician, Prof. Samuel K. Annim.

Despite the two percent drop, Dr. Akoto believes 38 percent inflation rate is unbearable.

"Even 20 percent inflation rate is not good for any country, and that is why we are all feeling the heat," he posited.

He added, "Today, Ghana is buried in debt, and this will forever cling us to the apron strings of our borrowing agencies. We can not control and manage our economic indeces when we are so much swallowed in debts. They will continue to dictate the pace and control our economy."

The Cambridge trained Economist said that for Ghana to wean itself from the shackles of economic bondage, its reliance on borrowing must cease since it is unsustainable and adopt pragmatic local economic policy that hinges on agriculture for development.

He said Ghana needs a policy shift and for that matter, an economic policy that will make the country focus and invest in agriculture which has shown so much prospects in providing the needed jobs for the teeming youth.

“...as President, I will be able to initiate the process of restructuring the economy of Ghana by allocating public resources to benefit agriculture, with farmers, processors, marketers and advertisers, and so on. That is what I intend to do because in the six years that I have been in the ministry, I have seen that with the least incentives to farmers, their responses have been incredible. Farmers in the six years that I have worked with them have proven that indeed they can deliver”, noted the former two-term Member of Parliament (MP) for Kwadaso Constituency in the Ashanti Region.

Continuing, Dr. Akoto, who worked in the UN systems for 18 years said a well-developed agricultural sector is the antidote for youth unemployment, referencing the achievement of the government’s flagship program, Planting for Food and Jobs (PfJ) which he initiated and implemented when he was the Minister for Food and Agriculture as a clear example of what to expect when becomes the President of Ghana.