Economist, Professor Lord Mensah says Ghana’s discovery of oil has had no impact whatsoever on the Ghanaian economy since 2007.
According to him, the oil only became an add-on to boost investor confidence when the government needed to borrow funds from the international market.
He said, “We had our trajectory for revenue generation. The oil came to serve as an add-on and the question is what impact has it made? I believe that if you relate the oil find to our borrowing trajectory clearly the oil just came to give us more space in borrowing.
“We discovered oil 2007. 2007 quickly we went to the Eurobond market to borrow. We borrowed from the Eurobond market which had its own responsibility but then it came to the time that we were supposed to service these funds that have been borrowed from the Eurobond market, we had to go and issue a new bond to offset the old bond.”
Speaking on PM Express Business Edition he noted that the chain of borrowing that occurred as a result of the oil-boosted-confidence is partly responsible for Ghana’s accumulated debt levels today.
“So that chain of borrowing has been with us since we discovered oil. And so for me the oil gave us kind of confidence for which when we issue bonds the investor will have that kind of trust, that kind of assurance in our environment to give money and that is even one of the reasons why we’ve accumulated debt to this level,” he said.
He noted that in relation to economic growth, the country has nothing to boast of that was achieved through oil money.
“So for me the oil has come to add on to the economy but it didn’t make impact because if you look at the trajectory of our economic growth, there has not been much change. The only time that we peaked in our economic growth we got around 15% somewhere around 2011 it has been dip and that kind of cyclical movement all this while and as we speak now our economic dip is even far far lower than the pre-covid period if you take the 4th republic into perspective,” he said.
GhanaFeed.com