Policy expert and BBC commentator argues that debt cancellation for African countries is 'not viable', criticizes cost of Ghana's National Cathedral

Bright Simons, policy analyst at the IMANI Center for Policy and Education based in Accra, Ghana, joined Doha Debates for a podcast to discuss current feelings on African debt cancellation. The discussion comes shortly after the G20 finance ministers convened in July to discuss debt cancellation for developing countries, among other topics.

The podcast was hosted by Nazanine Moshiri, journalist and a senior analyst at the International Crisis Group in Nairobi.

A Ghanaian social innovator, entrepreneur, writer, and regular BBC commentator, Bright Simons offered his take on why the arguments for debt cancellation frequently offered in the past no longer apply today.

Simons stated, “Because the nature of who is lending has changed, the debates we all supported around the early 2000’s about owing debt no longer apply. Why? Because in the early 2000’s, certainly the1990’s, 80% of Africa’s debt was owed to official creditors IMF, World Bank, rich country governments. Why is that important? It’s important because they lent the money on the basis of programs…In those circumstances, if the countries can’t pay back, you need to share the blame between those who gave the money for those programs, and made an input into those programs, and the government.”

“In the case of private investors, they don’t have that influence. If Ghana’s policy fails, and the Ghana government cannot pay back, we cannot expect the same degree of blame sharing”, he added.

Simons also questioned his country's fiscal responsibility, as controversy grows over the $1 billion cost of building the National Cathedral in Ghana.

“If we just simply say, everything is the fault of the global system, everything is the fault of the international system, we lose out. Ghana is a country that is building a billion-dollar cathedral.... We have to ask hard questions of Global South leaders and ask that they reform their fiscal systems.”

“Last year, the government of Nigeria collected about $22 billion in taxes. They spent nearly $10 billion in subsidies for petroleum products, the bulk of which is consumed by rich people. When you spent nearly 40% of what you collected as a government in an investment that for the most part benefits the upper middle class -- you cannot turn around and say because we are spending so much on debt, we need debt cancellation”, he explained.

Simons also addressed some common concerns of campaigners seeking to cancel debt in Africa.

He said: “The point that international campaigners refuse to grapple with is the fact that the bulk of the debt service and burden, which is what they are worried about the amount of money that should be going to education, health etc. going to debt the bulk are going to private debt lenders domestically. Nearly 80% in the case of Ghana, over 60% in the case of Nigeria, and getting to that same level in Kenya. So, you can’t ignore the domestics. Because if you are concerned about money going to debt, and the majority of that money is going to domestic credit, you need a theory of how you incorporate that into your analysis.”

On the Doha Debates podcast, Simons also explained, “We have to distinguish between debt restructuring and various ways of making it easier to pay the debt back, and debt cancellation.”

He continued, “Typically, debt cancellation means writing off the debt completely and typically it also means that countries do not have the learning opportunity to understand what has gone wrong to fix it.”

Simons argued, “There is significant variety among developing countries, among all developing countries, when it comes to debt and the burden the debt imposes. In Africa for instance, there are countries that also borrow money for infrastructure purposes and other developmental reasons. Not all of these countries are facing significant debt pressure. In fact, if you take the 55 countries in Africa, you will struggle to mention 10 of them that are facing the kind of debt distress that the news headlines are capturing for countries like Zambia, Ghana, Ethiopia, Kenya and others.”

“There are other countries that have grown at the same pace as the big economies in Africa and they’ve done so while paying their debt and while keeping their debt service and cost within reason. And their growth is on track.”

“It’s true that the pandemic and conflicts in different regions have had a great impact on the suffering we have seen. But the truth is, not all countries have suffered the same way because different countries have built buffers", he further stated.

Finally, Simons concluded, “My whole argument is that this whole global campaign, which does not respect local diversity and all these nuances, is not viable.”

“My last point is, we have been down this road before. We spent $125 billion of global resources in giving debt relief to countries in the Global South -- 33 countries in Africa benefited from debt relief. It opened the door for them to begin to borrow commercially” which led to its own risks.

The Doha Debates Podcast is a biweekly podcast that brings together people with starkly different opinions for an in-depth conversation that tries to find common ground.