According to the United Nations, Ghana and some other African nations will have to take significant steps to reform the global financial system. Charles Abani, the UN Resident Coordinator in Ghana said that if that was not done, they risked not being able to pay off their public debts.
In light of the combined effects of the COVID-19 pandemic and the Ukraine war, Africa is reportedly experiencing a double crisis. The document also warned that if corrective action is not taken, the continent risked falling victim to the cycle of dependency.
He, urged the nation to find ways to become more resilient. His remarks follow forecasts by the International Rating Organization Fitch, which states Ghana’s debt repayment default is predicted to occur with a probability of over 50%.
The rating agency claims that if negotiations for a $3 billion package with the IMF result in debt restructuring, the country’s sovereign credit rating might be further downgraded, bringing it closer to default. Mr. Abani forewarned that a debt crisis will affect Ghana and other African countries the following year as a result of default in payments. He, therefore, urged Africans to develop greater resiliency in the face of these difficulties and not be caught unawares.
Additionally, he said that a variety of systemic level solutions had been requested by the UN Secretary-General. The first is that there must be a change in the framework of the world’s financial system. He also mentioned that they predicted a debt crisis for next year, one that had resulted from some of COVID-19’s impact and the non-occurrence of expected growth.
Mr. Abani further stated that many nations will suffer debt defaults unless evaluations are made and ideas are generated on how to finance the globe more evenly.
Undoubtedly, the impact of the global pandemic and the Russian-Ukraine war on countries across the world cannot be underestimated. While some countries are gradually recovering from the situation, others are in a dire state and need to be rescued. Will our African leaders take these predictions seriously and put in the measures to prevent the debt crisis or will they linger on until another disaster strikes?
Priscilla Fumadorh
Priscilla is an entrepreneur and a creative communicator who loves to communicate through writing. She is passionate about national economic issues and does not miss a chance to offer her opinions on them for the good of the country.
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