Professor John Gatsi, a finance Professor, has taken on Finance Minister Dr. Mohammed Amin Adam for suggesting that securing a debt restructuring agreement will automatically free up $8 billion for infrastructure development. Professor Gatsi argued that this perspective is ‘weird’ and misleading.
Speaking at a town hall meeting in the United Kingdom, the Finance Minister expressed optimism about the country’s economic future, predicting stronger economic growth, a more stable cedi, and increased infrastructure projects. He even projected an economic growth rate of over 5%, surpassing the 2.8% target, and claimed that the debt restructuring agreement would restore confidence and attract foreign investments.
However, Professor Gatsi, who is also an economist, challenged these assertions, saying that unless government had some funds hiding somewhere, the claim was untenable. He clarified that the $8 billion mentioned is not a readily available fund for infrastructure but rather money that Ghana would have been required to mobilise for debt servicing.
“It is not like the way the Finance Minister in a campaign mood was talking. He talked as if there was $8 billion that is coming to Ghana and that will be used to finance infrastructure, I don’t know where he got that kind of thinking from,” he told The Accra Times.
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Professor Gatsi, who is the Dean of the University of Cape Coast Business School, criticised the Finance Minister for what he termed as misleading rhetoric. He urged the Finance Minister to avoid making statements that could be perceived as propaganda and to communicate more appropriately to maintain public trust.
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“Even if you were baptized in politics and everything you do is politics, the moment you become a Finance Minister, a Governor, an Agric Minister, a Trade Minister, your way of talking and the things you do will have to change,” he stated.
Furthermore, Professor Gatsi argued that investor confidence would not automatically return with the debt restructuring agreement. He emphasised that confidence would only be restored when Ghana meets its obligations under the agreement reached with the external creditors.
“The investors have lost money. They are expecting two things from you; build an escrow account and at a particular point in time begin repayment of debts. It is when those things happen religiously that the confidence of investors will be revived. It is not because they have signed an agreement,” he stressed.
Professor Gatsi also noted that the true indicator of the country’s economic trajectory would be the content of the mid-year budget, rather than mere rhetoric.
