In lieu of requesting an outright cancellation, the government of Ghana would reprofile its debt with the G20 developing nations, according to Finance Minister Ken Ofori-Atta.
Members of the Paris Club have already agreed to establish a committee of creditors to talk about debt restructuring and potential debt cancellation for Ghana.
Regarding their request for debt cancellation from the Paris Club of International Creditors, the government has drawn some criticism.
If the proposal is approved, according to some observers, it would encourage the government to borrow carelessly.
George Wiafe and Mr. Ofori-Atta disputed on PM Express Business Edition, and Mr. Ofori-Atta said that the Paris Club members are always open to debt re-
"Paris Club is a debt renewal, but necessarily a debt discharge. We are essentially talking about the float today to look at the interest rate and the maturity time to make sure that it does not have an excessive affect on us.
He clarified that the second problem the government would have to address with the appropriate parties is one of debt reduction and debt elimination.
A little more detail was provided, and he made note of the fact that the government is addressing both local and foreign creditors, which presents a dual difficulty.
The domestic debt programme is what we have. Eventually, we want to reach a 25 percent interest rate, so we'll cut our interest costs. You have your Paris Club and other nations' programmes, which smooth away the necessity for payment," he remarked.
In order to drive the nation's economy toward growth, Mr. Ofori-Atta noted that it is crucial to strive toward achieving a sustainable debt reduction both domestically and internationally.
The target is what we are referring to since the combination of all of those things takes us there. 18% debt service is more than revenue, and the debt to GDP ratio is 55%, he said.
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