Ghana’s debt to its Gross Domestic Product (GDP) is going to surpass 82 per cent at the end of the year 2024, Yapei Kusawgu lawmaker, John Abdulai Jinapor, has quoted the International Monetary Fund (IMF).
This, he says is a depiction of the government’s poor fiscal policies which has depreciated the local currency, as well as the numerous borrowings it has embarked on over the years.
According to him, the Akufo-Addo government has set a record by being the only government to default on its bonds, breaking the risk-free rule of investing in government treasury.
He explains that people resort to government bonds when they don’t want to take a higher risk of losing their monies. However, Akufo-Addo’s administration has changed the narrative with the Domestic Debt Exchange Programme (DDEP)
“If you want to invest in a security, the returns that you get are in two-folds; the risk-free rate which is normally government treasury or government bonds.
“If you don’t want to take so much risk, you invest in government bonds and it was assumed that hardly would government default. So the NPP government has come to demystify or change that narrative where we say that if you want a safe investment, invest in government bonds,” he said on the KeyPoints Saturday, October 26, 2024.
John Jinapor was commenting on the government’s claim that the economy is bouncing back and Ghana is reverting to the pre-covid era.
In his analysis, he said it is not true that Ghana is heading towards the period before the struck of Covid-19 especially when the IMF is predicting such doom for the economy in terms of debt to GDP ratio.
“Today IMF is saying that we are going to get a debt to GDP ratio of 82%. The IMF itself says at the end of this year, our debt to GDP is going to be 82.9%. If your debt to 82.9% by the end of this year, you’re not making any headway and you cannot be returning to pre-covid era so this idea that we are making some significant progress, I don’t see it.
“It takes the exchange rate, debt, borrowing, credit to the private sector, Bank of Ghana itself, it looks like we are headed for a very serious challenge going forward in 2025,” he stated.
Ghana’s debt stock now GH¢575bn; debt to GDP ratio stands at 93.5%
