President Nana Addo Dankwa Akufo-Addo has warned that Africa will become the forgotten continent without the needed fiscal room to breathe. Africa needs fiscal room to breathe or becomes a forgotten continent
He said to stop that from happening, “there is an urgent need for comprehensive debt relief and debt cancellation.” The president made this known on Tuesday, May 18, 2021, when he spoke at the Summit on Financing African Economies in France.
According to Akufo-Addo, just as the Bretton Woods institutions helped in rebuilding the postwar global economy and rekindled international economic co-operation 77 years ago, “there is now a historic opportunity to reset the global financial system’s economic rules to give African countries an equal chance at development in the wake of the pandemic.”
President Akufo-Addo told the summit that the structural inequities confronting African economies have been made worse by COVID-19, leading to the rise of the continent’s total fiscal deficit from 4.7% of GDP in 2019 to 8.7% in 2020.
Overall debt levels are also estimated to have increased from 57% of GDP in 2019 to 70% in 2021. The president proposed two solutions at the summit that he thinks will help address the situation confronting the African continent.
These two solutions, the president said, should focus on restructuring the global financial architecture to provide access and equity to long-term finance to support economic transformation in Africa.
“This should include the establishment of an African Stability Mechanism, akin to the European Stability Mechanism. The African Stability Mechanism will be a permanent firewall for Africa to safeguard and provide instant emergency access to financial assistance for countries in financial difficulty,” he said.
Meanwhile, the president as reported by YEN.com.gh earlier said there will be no salary increment for himself, the vice president, and all the appointees of the executive this year.
That, according to him is their “modest contribution to reduce the damage to our public revenue and to help hasten our nation’s recovery from the ravages of the pandemic.”
Ghana’s total public debt increased from GHS122billion to GHS291.6billion as of the end of December 2020. The increase was attributed to the current coronavirus pandemic, the banking sector cleanup exercise among others.
The fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion.