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It has been truly fascinating to watch the Greek drama being played out before the whole world. Who would have thought that owing money could provide such fertile material for high drama?


As I am not very good with figures, it is not the billions and hundreds of billions of euros being bandied around that have been the attraction for me; it is the sheer chutzpah of the Greek leadership and the political theatre on the European Union stage that have held me spellbound.

I admit to being a political and news junkie and therefore I was always going to follow keenly the story of the Greece debt crisis. But I believe the extra attraction has come from Ghana, my own country, being in a similar situation.

Greece might be getting all the international headlines but according to a new analysis by the Jubilee Debt Campaign, Greece’s plight is far from unique and more than 20 other countries are also wrestling with their own debt crises.

Many more, according to the group, lie in, what is termed: “a debt danger zone,” where an economic downturn or a sudden jump in interest rates on world debt markets could lead to disaster. And it is in this zone that the analysis places Ghana very firmly.

The new Greece government has been making great play about the unsustainability of the debt the country owes the ECB and this position appeared to have been reinforced by the IMF report which admitted without stating so, that Greece cannot pay what it owes.

It is not surprising therefore that some are turning their minds to a previous round of debt forgiveness for countries that were deemed to have unsustainable levels of debt. It is after all the tenth anniversary of the Gleneagles summit when the then British Prime Minister, Tony Blair, goaded on by Pop stars Bob Geldof and Bono, led the leaders of the G8 countries to undertake debt relief programmes for many African countries, including Ghana.

loading up on debt

Some of the countries said to be currently in the debt danger zone were beneficiaries of the debt relief programme that G8 leaders signed up to at the Gleneagles summit in 2005. Judith Tyson of the Overseas Development Institute think tank says the idea of the debt forgiveness was to provide the countries “with a clean slate to go forward.” She says that a number of those countries have since “loaded up” on debt – and while some governments had invested the money wisely, diversifying their economies and improving infrastructure, others had not.

She cites Ghana as one of the countries where a sharp increase in borrowing has been spent on what she calls “pork-barrel politics. They’ve spent it in a frivolous way.”

Ouch! President Mahama himself doesn’t use quite the same colourful language in describing what has brought Ghana to such a sharp reversal of fortunes. He claims we are in our current predicament because he has been playing Father Christmas; he told the Financial Times: “the government felt the need to give workers better remuneration.

The FT quoted him as saying: “As the economy grows you want to remunerate the public sector better to motivate them . . . you want to put in infrastructure, you want to do a lot of things . . . You can pile on debt quite quickly.”

Really? How come all these public sector workers he claims to have remunerated so handsomely are constantly on strike or threatening to go on strike for better conditions of service? Plus, the President cannot claim it all happened so quickly, he didn’t see it coming.

Bawumia’s warning

We are all witnesses to him telling off Dr Mahamudu Bawumia in the most cavalier manner he could muster when Dr Bawumia warned that government borrowing was getting out of hand.

In April last year, the President told Dr Bawumia: “We did not borrow to drink or to eat; (72 per cent of government revenue paid as wages to the public sector, which is made up of some 700,000 out of a population of 25 million) we borrowed to bring facilities such as electricity and water to the people of Ghana (there are questions about every contract that this government has given, from Ridge hospital to interchanges and airports) and that is how you pile up debts quickly, unsustainable debts, that is.”

Borrowing appetite

There is nothing to indicate that our government has any intention of taming the borrowing appetite, the recourse to the IMF notwithstanding.

Last week, parliament was asked and it passed three loans totalling more than one billion US dollars to add to the external debt stock.

Every Monday morning, the Bank of Ghana provides us the evidence in the Daily Graphic of government borrowing from the domestic market.

Last week the auction of Treasury Bills came to GH¢ 1,028.00 and next week, we are told the target is GH¢ 1,063.00 million. With a juicy interest rate of 25 per cent , it is no wonder the banks fall over each other to buy up the T-Bills on offer.

The Greeks have been doing something not dissimilar. Seventy-five per cent of government expenditure is going on public sector wages and pensions.

Unfortunately for them, their central bank cannot print money by holding T-Bill auctions at 25 per cent interest rates to meet government expenditure.

They have the European Central Bank to deal with and the tax payers of the Eurozone countries they belong to and every day a new imaginative excuse is found why the debts should be forgiven.

When the IMF team came to check on how we were doing, I tried to imagine our President Dramani in the role of Alexis Tsipras, the Greek Prime Minister, and our SethTekper in the role of Yanis Varoufakis, the Greek Finance Minister, who managed to upset everybody in the Eurozone negotiation team and had to step down as part of the terms for the bailout.

Somehow my imagination couldn’t reach such heights. Mercifully the single currency project for the ECOWAS area remains a dream and so we have our own cedi to confront. We can make any number of promises and break them as often as we care.

And when our government runs out of excuses, the Finance Minister tries to make us believe we all moan too much. We shouldn’t complain about dumsor because apparently 72 per cent of Ghana has electricity. This really is all Greek to me now.