Debt crisis and Ghana’s economic diplomacy

Abstract

The study sought to investigate how Ghana‘s debt crisis with the Bretton Woods Institutions influenced its economic diplomacy in the fourth republic. Other objectives of the study were to; find out how the debt crisis in Ghana‘s fourth republic has impacts the country‘s economy and its citizenry; investigate the factors and reasons responsible for Ghana‘s debt trap to the West (Bretton Woods Institution). The study utilizes neoliberalism and debt trap theories as theoretical underpinnings. The study adopted the qualitative approach using a causal design. Primary and secondary data collected were analysed using thematic narratives. The data analysed established that Ghana‘s debt with, the IMF/WB has reduced its vibrancy in economic diplomacy and increased its alignment with the West. The study further revealed that, Ghana has been trapped in debt to the West through loan repayment schedules, dependence and reliance on IMF/WB loans for development. The study concludes that IMF/WB loans contain conditionality‘s and SAPs, which is the ideological basis of neoliberalism and are strict measures with which Ghana and other developing countries are greatly contesting. The study recommends four alternative funding sources for Ghana and other Less Developing Economies (LDEs). First, reaching out to foreign bond market. Second, support China‘s Large-Scale direct infrastructure investment policy. Third, Ghana needs to keep pushing for true free trade in agricultural goods. Fourth, they should support financial intermediation. In addition, it recommends the ―East Asian IMF Principle model‖. Further study suggested includes replication of the study but with case studies such as the International Bond market or other IFIs and comparative study of IMF/WB under two different governments in Ghana‘s fourth republic.