Ghana's Debt Situation: CSJ's 20-Year Report Shows Looming Crisis If Trend Remains Unchanged
- Ghana's debt situation is approaching very dangerous levels, says a debt sustainability report compiled by think tank CSJ
- The report reviews Ghana's debt data between 2010 and 2019 and warns that the country risk severe economic shocks if debt accumulation trends persist
- A key recommendation is for the policymakers and managers of the economy to pursue true economic growth and cutback on borrowing
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An Accra-based think tank, Centre for Social Justice (CSJ), has released a report of Ghana's debt sustainability profile over a 20-year period, showing a looming crisis if trends remain unchanged.
Titled "A 20-year review of Ghana's public debt: Trends, Drivers, and Implications," the report warned that Ghana risks irreparable damage to its credit rating unless the government's pace of debt accumulation is slowed.
The report urges policymakers to focus on efficient management of the economy in a way that guarantees real growth and prosperity.
Using data from the World Bank, the International Monetary Fund (IMF), the Ministry of Finance and the Bank of Ghana, the Finance and Economic Pillar of CSJ found that Ghana between 2010 to 2019 has reported an unhealthy rise in domestic and external debt.
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"The public debt-to-GDP ratio was 80 percent by the end of the first quarter of 2022, a level not seen post-HIPC," the report noted.
Quoting figures from the finance ministry reported that as of December 2021, Ghana's total public debt has risen sharply to $58.6 billion (GHc351.8 billion), representing 76.6% of GDP.
A year earlier, in 2020, the debt figure was $50.8 billion (GHc291.6 billion), representing 76.1% of GDP.
The report projects that Ghana's debt-to-GDP ratio will reach 85% b 2023 as the country ranks among the top 10 countries in Sub-Saharan Africa with the highest debt-to-GDP ratios.
To resolve the country's debt accumulation challenge, the report recommends that Ghana strikes to restore confidence in the domestic and international investment and debt markets.
For short-term Strategies, the report called for immediate fiscal consolidation efforts to enhance revenue mobilisation and reduce expenditures.
"In its fiscal consolidation efforts, the government should consider reducing the size of the State or at the very least capping expenditures and leverage newly implemented institutional measures, such as the national identification systems, to boost revenue mobilisation".
It also recommended that the government engage creditors to initiate a process for debt re-profiling and restructuring.
Initiating this process may require the involvement of major development partners, including the IMF.
Prof Opoku-Antwi Accuses International Monetary Fund Of Contributing To Ghana’s 'Scam Leadership'
YEN.com.gh reported earlier that a Ghanaian professor of leadership and management, Enoch Opoku-Antwi, has accused the International Monetary Fund (IMF) of being part of Ghana’s decades-old economic problems.
Prof Opoku-Antwi, a management expert at Viterbo University in the United States, said the IMF constantly backs the scams committed by Ghana’s political leaders.
Speaking on Class FM's live morning show on Thursday, 7 July 2022, Prof. Opoku- Antwi said greed, corruption, propaganda, and cooking figures to please the public have been the cause of Ghana’s economic woes.
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