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27 Oct 2018

Ghana does not borrow to burden itself, says Akufo-Addo

Ghanaian President Nana Akufo-Addo says his country only take loans to create assets that can pay back the loan — not to burden itself with unserviceable debts.

Speaking at the Tony Elumelu Foundation (TEF) entrepreneurship forum on Thursday, Akufo-Addo said his country does not borrow to fund inflated contracts nor ill-conceived contracts.

He said borrowing money is not aid, and what President Xi Jinping offered Ghana, Nigeria and the rest of Africa is a loan.

“It is a $60 billion fund, which Africa can accept, not as aid but loan. If you introduce a project that the Chinese is supporting, you can have access to that money, but you have to pay back,” he said.

“We would borrow money, everybody borrows money, the United States of America is one of the biggest debtors in the world. Borrowing money is not necessarily a betrayal of the concept of independence.

“The key for us in borrowing money is that we borrow money to create assets that would allow us to pay the money back. That is the key.

“Not to borrow money and get involved in inflated contracts, not properly thought out contracts and burden ourselves, so that one day, we can’t pay back.

“If we borrow the money and use it properly, it is an asset for us; expanding our economy and expanding our infrastructure.

“People want to invest in the development of railways in Nigeria, that is not dependence, that is investing in your infrastructure, and what it would do to promote business in Nigeria is the way you pay it back. The Chinese have said we have to stand on our own two feet to develop our country.”

This is coming at a time when Nigeria’s debt service to revenue has become unsustainable, according to Doyin Salami, associate professor at Lagos Business School.

Nigeria’s debt profile has risen by 145 percent in the last three and a half years.

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