A Ghanaian economist, based in the United States of America, Dr Sa-ad Iddrisu, has proposed innovative solutions to address Ghana’s mounting debt crisis.
Speaking on the AM Show on Joy News, Dr Iddrisu, highlighted the nation’s precarious economic situation, where annual interest payments on debt have reached $1.4 billion.
He outlined three possible approaches for managing the crisis but emphasized the need for a bold, outside-the-box strategy to bring long-term relief.
According to Dr Iddrisu, the first option is to default on debts entirely, akin to General Acheampong’s method during the 1970s. However, he cautioned that this approach could result in dire consequences, such as a tarnished credit rating, loss of investor confidence, and exclusion from international lending platforms like the Eurobond market.
The second approach, he said, is to continue what he called a “rat race” of borrowing to pay off existing debts, effectively postponing the problem for future administrations. This, he warned, is unsustainable and detrimental to Ghana’s economic stability.
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Instead, Dr Iddrisu, urged the government to consider a third option: innovative strategies such as debt-for-nature swaps. Highlighting successful examples from countries like Belize, which reduced its external debt by 10% of GDP through a debt-for-nature deal, he encouraged Ghana to explore similar avenues.
He pointed to the nation’s environmental challenges, such as deforestation and river pollution caused by illegal mining, as potential leverage in negotiations with global conservation organisations like the Nature Conservancy.
“This is not a new concept; it is already being explored by countries like Gabon, Sri Lanka, Ecuador, and Cape Verde.
“Instead of repeatedly turning to the IMF, we’ve gone there 17 times it’s time to innovate and prioritize sustainable development.” Dr Iddrisu stated.
He emphasized that money saved through debt swaps could be redirected toward developmental projects and job creation, which would have a direct positive impact on citizens.
Dr Iddrisu criticized existing employment schemes, such as NABCO, for failing to create sustainable, long-term jobs and labeled current low wages in Ghana as exploitative.
“The government must lead by example in providing fair wages and creating sustainable jobs for the people.
“If you focus on the people, the economy will naturally improve, because the people are the economy.” he stressed.
Dr Iddrisu’s call for a shift in Ghana’s debt management strategy resonates with growing global interest in aligning economic recovery with environmental sustainability.
His recommendations challenge policymakers to prioritize innovative solutions that serve both the nation’s financial health and the well-being of its citizens.
