The rising debt profile of Ghana, has been generating concern, despite assurances by the government that there is no cause for alarm.
The International Monetary Fund (IMF), on December 12, in a statement expressed concerned about Ghana’s current status as a country at high risk of debt distress – a reference to countries where debt sustainability analyses (DSAs) show protracted breach of debt and debt service thresholds.
The latest DSA report by the IMF and the World Bank Group showed that Ghana was among 10 low-income countries (LICs) in Africa that were at high risk of debt distress.
The list showed that Ghana and Cape Verde were the only countries in West Africa at high risk of debt distress, while The Gambia was the only country in the subregion classified as being in debt distress.
The statement came at a time when the public debt stock ended September this year at GH¢208.6 billion, equivalent to 60.3 per cent of the value of all the goods and services produced in the country, measured by gross domestic product (GDP), according to the most recent data released by the Bank Ghana.
While borrowing might not be bad in its entirety, we believe that for the nation’s economy to grow, the government should spend wisely in critical projects that can stimulate economic growth. So far, that doesn’t seem to be the case.
Prof. Quartey, who is the Director of the Institute for Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon, in an interview with the Daily Graphic, has said the high risk of debt distress status did not augur well for the country.
According to him “Quite a number of multilateral institutions are a bit reluctant to lend to countries that have been classified as high risk of debt distress.
“For instance, the African Development Bank (AfDB) has been struggling with this tag because its policies do not allow it to lend so much to such countries,” he said, noting that the same applied to other donors.
In the opinion of this newspaper, Ghanaians should begin to question the efficiency of borrowing by the government, whether it is the present government or former administrations.
We conclude by saying that, the government must not be profligate with regard to the management of its debt resources, especially as next year is an election year.