The Dean of School of Business, University of Cape Coast (UCC), Professor John Gatsi, has asked the current and subsequent governments to properly manage Ghana’s debt in order not to burden the future generation with unsustainable debt.
He has also called for the inclusion of young people in discussions geared towards the effective management of the country’s public debts to help them appreciate Ghana’s current debt management issues better.
Speaking at the fourth edition of GRASAG Virtual University Webinar, a virtual education platform developed by the Graduate Students Association of Ghana to aid learning in the wake of the Covid-19 pandemic, Prof Gatsi underscored the need to understand and ensure proper public debt management by the present generation in order to sustain the future generation.
Explaining ‘future generation’ from the perspective of petroleum revenue management, Prof Gatsi described the term as people who will be alive by the time the petroleum resources will be depleted and the country will no longer be producing petroleum products.
“Basically, they are people who will be alive during the payment of any debt incurred by this current generation,” he said
According to him, debt management is governed by laws, policies and principles as enshrined in the Public Debt Act 182 (1) of 1992 Constitution of Ghana. He said it is therefore necessary that the future generation is involved in such discussions for them to understand the issues.
Ghana’s Public Debt Act provides for the management of the country’s debt through what is referred to as sinking funds. These funds are established by an economic entity by setting aside revenue over a period of time to fund future capital expenses or to repay a long-term debt.
There are two main sources of public debt, which are externally procured and internally procured. According to Prof Gatsi, when foreign export is not performing well, the revenue generation is disturbed while depreciation on the import led economy helps in the mobilization of funds by the government.
He therefore call for the undertaking of activities geared towards revenue generation through investing in the economy while reducing high expenditures.
Ghana’s debt to GDP ratio currently stands at 67.2 per cent, crossing the threshold of 60 per cent, which is the international standard of debt sustainability.
Prof Gatsi noted that the importance of the private sector in alleviating the burden of the public sector cannot be underestimated, and charged stakeholders to ensure the proper management in order to generate more revenue.
He also identified the need for regular evaluation of debt management procedures to maintain a consistent track of progress.
In a related development, GRASAG has reiterated its call on the need for the country to prioritise post-graduate research and to also take another look at postgraduate funding in the country.
According to GRASAG, it is a proven fact that a country’s development hinges on on research, saying Ghana must begin to give the needed attention to research.
“In giving the needed relevance to research, GRASAG believes this can be done by incorporating the research findings of post-graduate students into national development planning. By so doing, not only is the youth/students being called to the table, it also enforces the point that his views are relevant to the ‘cooking of the national meal’,” the Association said in a statement signed by its General Secretary, Kwasi Frimpong on Wednesday to mark this year’s International Youth Day celebration.
“We want to be given the opportunity to contribute to the development of our nation. We are energized. We are talented. Use our energy and talent purposefully for the socio-economic development of the country,” the statement added.