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Financial diversification panacea to Ghana’s periodic economic woes – Experts

Some professors of Finance have called on the government to urgently diversify Ghana’s financial sources and be ruthless in tackling corruption and illicit financial flows.

Prof John Gatsi, the Dean of the School of Business, University of Cape Coast (UCC), and Prof Godfred Alufar Bokpin, University of Ghana, made this call in an interview with the Ghana News Agency.

It comes on the heels of an internal memo reportedly from the Ministry of Finance indicating that Ghana could lose US$3.8 billion financing from the World Bank should the President assent to the Proper Human Sexual Rights and Ghanaian Family Values Bill.

The Ministry also said such development could negatively impact the country’s foreign exchange reserves and exchange rate stability as well external support to the 2024 budget.

Prof Gatsi said the seeming threat from the Finance Ministry’s alleged memo on the possible negative impact of the President assenting to the Bill, ‘is a strategy to blackmail Ghanaians to support the President not to
sign the Bill.’

He noted that both the International Monetary Fund (IMF) and the World Bank could have some concerns about the right of people, including those in the LGBTQ community, but ‘The IMF programme that we signed has no conditions that the government should not pass the LGBTI Bill. Again, the World Bank does not have any condition, such as the LGBTQ issue before they extend loan to any country.’

The finance professor encouraged the government to explore alternative financing sources, including, Islamic Banking.

Islamic Banking, which provides a system of lending and borrowing without interest and proceeds shared based on profit and loss basis, together with other financing sources, he said would be sustainable for Ghana’s development agenda.

Prof Bokpin indicated that though the country could not lose sight on some consequences on the President assenting to the bill to become law, ‘the statement form the Finance Ministry is to create fear and panic’.

He said Ghana had similar threats in the lead
to independence, saying, ‘our forefathers knew that there was going to be implications for Ghana gaining independence – financial loses and access to prestige, but they decided to go for independence.’

He said there were countries that had anti-LGBQTI laws with harsher punishments but had programme arrangement from the IMF, including Egypt, Tunisia, The Gambia, Zambia and Chad.

The professor said though the World Bank and the IMF would not use the anti-LBGTQ law as a weapon of first resort against Ghana, the time was now, for the country to take bold steps to ‘move beyond aid’.

‘Whether we sign the anti-LGBQTI law or not, aid is not sustainable for any country in Africa. The amount Ghana loses through corruption and illicit financial flows is far more than this aid that we’re talking about from the West,’ he said.

‘Nobody will come and develop this country for us, if so, they would have done it long ago. Let’s block all revenue leakages, apply them efficiently, and use our contractors to construct the roa
ds so we keep the profit here,’ he recommended.

On the matter of Ghana developing by itself, the Ministry’s memo indicated that fortifying local financial systems, and strengthening African financial institutions would help in navigating the complexities of international relations towards building a robust and resilient economy in line with the ‘Ghana Beyond Aid’ agenda.

Source: Ghana News Agency