World must ensure Africa borrows at fair rates to repay at proper timeframe
Ghanaian Finance Minister Mohammed Amin Adam on Friday said the world must ensure that Africa can borrow at reasonable rates so that it repays at a proper timeframe during his visit to Radio Africa Group Limited.
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00:00How do we grow the economy the size of the GDP so that our debts become unsustainable?
00:06How do we control borrowing, you know, so that we are moving away from expensive credits
00:15to more concessional credit facilities?
00:18How do we ensure that we leverage private sector funding through public-private partnerships
00:25to bring in capital into our economy?
00:29So, we have learned lessons on how to do all this so that we can have an alternative policy
00:38on development vis-Ã -vis what we have seen in the past.
00:44Secondly, we are currently doing negotiations to restructure our debts.
00:51And it's not only Ghana.
00:53There are many African countries, more than 50 African countries, are classified as debt-distressed.
00:59Again, by the classification of the unfair global financial system.
01:05Okay?
01:06But only four countries are going through this common framework, the G20 common framework,
01:12for debt restructuring or debt treatment.
01:15Ghana is one, Zambia is one, I think, and Chad or Ethiopia.
01:20Yeah, yeah, there are others.
01:22But the lessons we are learning also is that there is no free lunch.
01:28These creditors are not going to be charitable to us.
01:32They are going to demand their, you know, pound of flesh.
01:38And that is what has been exerted on us.
01:42For example, you are asking creditors to give you discounts, what we call haircuts.
01:51They don't want to do that.
01:55You are asking official creditors to give you extended maturity.
02:02They don't want to do that.
02:05And therefore, you have to do tough negotiation.
02:10That requires the support of not just your country, but other countries,
02:16through diplomatic circles, through advocacy.
02:20And so, I want to use this opportunity to invite you to use your platform to do this advocacy for us,
02:32so that we can get significant debt relief.
02:37Significant debt relief.
02:40Not just the little, little, little, you know, concessions they are making.
02:47Because if we don't get significant debt relief, I'm not sure Africa is going to develop.
02:51We will use the next 100 years paying our debts, and we cannot be able to pay all these debts.
02:57Borrowing from the international market is so expensive.
03:01Sometimes we borrow at a cost five times what they borrow in their countries.
03:09So how do we pay?
03:12How do we pay? Why don't they make it a fair playing field, you know,
03:17for all of us who are partners and players in the field?
03:22So we need to ensure, and the world must ensure, that Africa can borrow at reasonable rates,
03:33so that we can repay within a reasonable time frame.
03:39That's very important for us.
03:42But largely, the lesson, again, that I think we have learned,
03:49is also to improve on domestic revenue mobilization, to reduce our dependence.
03:58I believe if we reduce our dependence on them, they will not take us for granted.
04:08And the only way to reduce our dependence is to also increase domestic revenue mobilization.
04:15How do we do that? I'm not saying we should overtax our people,
04:20but we should ensure that we bring efficiency to bear on our revenue collection,
04:26in our tax system. Efficiency is important.
04:29We must make sure that we bring in the informal sector,
04:35so that we can widen the tax net, because a few people are paying the taxes.
04:42And therefore, if we expand the tax network and bring more people into the tax network,
04:50we do not only reduce the burden on the few, but we also expand our base,
04:57in order to generate more revenue to support our own development.
05:01That's also very important.