Prioritising China in debt cancellation quest not the best – Economist to government

Finance Minister, Ken Ofori-Atta

A development economist at the University for Development Studies (UDS) says government’s decision to place a premium on the involvement of China in pursuit of debt forgiveness is rather not the best.

Dr Michael Ayamga said although China is Ghana’s biggest creditor, the country would be in good standing if other external creditors join in to forgive its debt.

“We have made initial contact with our creditors and tried to engage China, which many have asked us to do. I beg to differ because I was not particularly pleased with our decision to prioritise China.

“We owe China $1.8 billion and we are talking about almost $30 billion and so even without China forgiving us our debt, if the rest come to the table, we should be fine,” he explained.

Speaking on the JoyNews’ AM Show, the economist expressed that Ghana is only being “dragged into this geopolitical discourses and tempted to believe that China is the big elephant in the room.”

According to him, the decision of other external creditors to cancel Ghana’s debt should not be dependent on China’s posture.

Meanwhile, the expert insists that although China has been painted badly, it is just as guilty as the West in terms of “debt diplomacy.”

However, there have been explanations from experts indicating that China would like to negotiate terms with Ghana on a one–on–one basis rather than join other creditors in the external debt restructuring exercise.

But there have also been warnings that such an approach would be of huge disadvantage to the country in debt because it stands to lose some state assets.

Sierra Leone has been cited to be a victim of this situation where China cancelled its debt of $300 million in exchange to control its airport.

Others fear this may become Ghana’s situation in case it decides to engage in a bilateral negotiation with China.