GHANA DEBT AND ITS IMPACT ON OUR ECONOMIC DEVELOPMENT.
By the year 2000, the government of Ghana had borrowed so much that the country was in debt distress . It then subscribed to the Heavily Indebted Poor Countries initiative of the International Monetary Fund and World Bank. Consequently, much of the country’s external debt of over US$4 billion was written off by creditors. By the time the initiative ended in 2006, Ghana’s total public debt stock was US$780 million (25% of GDP). The debt stock has since risen by 7000% to $54 billion, which is 78% of GDP . The current debt to GDP ratio is 78%, while the average for developing countries is 60%. Economist, Adu Owusu Sarkodie, explains how this happened, why it’s a problem and what can be done. How did Ghana get into this situation? After the Heavily Indebted Poor Countries initiative ended in 2006, the public debt stock has largely been driven by the continuous accumulation of budget deficits (48.6%), the currency deprecation (28.2%), and off-budget borrowings ...