According to him, Ghana’s track record has shown that, unlike other countries that borrow from the Fund for developmental projects, Ghana always goes to the Fund for a bailout.
He said the attitude to borrow as a bailout, makes it almost impossible to derive direct benefits from the loans.
“I am not surprised at all because anytime we go to the IMF, we go for a bailout. Compared to other countries that borrow for a purpose and invest in areas where they can get the cash flows and repay the loan, Ghana borrows for balance of payment support whereby we do not see any fiscal activity,” he was quoted by citinewsroom.com
In the International Monetary Fund’s (IMF) latest quarterly report, it noted that Ghana is the leading borrower of the IMF’s Poverty Reduction and Growth Trust (PRGT).
According to the report, Ghana is the most indebted country under that Trust broadly known as concessional loan and debt relief trusts.
It explained that this is because Ghana accounts for almost 10 percent of the 17,684 million Special Drawing Rights (SDR) in total loans still owed under the Trust by countries.
Prof. Lord Mensah however said that this data will send certain signals to investors who may not be exactly attracted to doing business in Ghana.
“This is debt information so anybody dealing with Ghana will be careful because the ability to pay debts is determined by the quantum of the money one owes. This ranking which puts Ghana as the highest IMF borrower in Africa means that if you are dealing with Ghana in terms of extending funds, you will have to be careful, and possibly if it is Foreign Direct Investment, one will have to look at the debt will affect the stability of the exchange rate,” Prof. Mensah added.