Prof. Peter Quartey, a distinguished professor at the Institute of Statistical Social and Economic Research (ISSER) at the University of Ghana, has recently highlighted the importance of imposing a strict debt ceiling, implementing prudent financial management strategies, and strengthening institutional oversight over the country’s resources. In a thought-provoking analysis presented at the 2025 Ghana Academy of Arts and Sciences Inaugural Lecture, Prof. Quartey addressed the pressing issue of Ghana’s debt sustainability and its impact on investment and growth.
During his presentation, Prof. Quartey emphasized the need for greater transparency in public procurement processes and better planning for capital projects to prevent misallocation of resources. He delved into the theme “Debt, Investment, and Growth in Ghana: Did We Borrow to Consume?” and critically examined whether Ghana’s escalating debt levels have been channeled into productive investments. His conclusion was resounding – the borrowed funds have not been effectively utilized for productive investment.
Over the past decade, Ghana’s debt-to-GDP ratio has skyrocketed to unsustainable levels. Prof. Quartey underscored the importance of effective allocation of borrowed funds, stating that excessive debt could hinder economic growth by acting as a “tax on investment” if not managed properly. Despite securing substantial loans, Ghana has witnessed a decline in capital expenditure, which is crucial for infrastructure development and economic expansion.
Drawing on real-life examples, Prof. Quartey illustrated the significance of financial discipline by contrasting the stories of an extravagant tech entrepreneur who squandered his wealth with that of a modest janitor who accumulated wealth through strategic investing. The key takeaway was that financial success is more about behavior than intelligence, a principle that extends to national economic management.
Furthermore, Prof. Quartey highlighted the inefficiencies in Ghana’s borrowing patterns, noting a shift towards expensive international capital markets from concessional multilateral loans. This shift necessitates a critical evaluation of whether borrowed funds have been invested in high-return ventures or used to service existing debts and fund recurrent expenses. He cautioned against the government’s hasty return to the capital market without a thorough assessment of investment efficiency.
In conclusion, Prof. Quartey called for the strengthening of public financial management, diversification of exports to reduce reliance on external borrowing, and the implementation of competitive procurement processes to ensure efficient allocation of resources. His insightful analysis serves as a wake-up call for policymakers to adopt sound financial practices and prioritize long-term growth over short-term gains.
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