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Godfred Bokpin, an economist and professor of finance at the University of Ghana Business School, says Ghana’s return to HIPC (highly indebted poor country) is anticipated.
The World Bank has listed Ghana in the category of highly indebted poor countries on its website. A report projects that Ghana’s debt to GDP, which is currently 68.3%, will reach 76.7% by the end of December 2020.
Speaking about the development in the Morning Starr on Tuesday, Professor Bokpin said that if the government continues to borrow and spend at the current rate, the economy will feel the negative impact after the elections.
“I am not surprised that we are back at HIPC. It can be understood and it can be explained. Ghana currently spends 46% of its generated tax revenue on debt service and is one of the highest in Africa. We will see the real effects of this after the elections. ”
Professor Bokpin added “of each CD that we generate, 46% is used to pay the debt. The rest goes to pay wages and salaries ”.
Dr. Saeed Boakye of the Institute for Fiscal Studies, speaking on the Morning Starr, told host Francis Abban that “it shows that the country has gone astray when it comes to running its affairs. You can’t keep borrowing and expect everything to work out. ”
Ghana’s public debt stock in June this year reached GH ¢ 255,727.1 million (US $ 45,486.1 million), according to Finance Minister Ken Ofori-Atta, during his 2020 mid-year budget review on Thursday, July 23, 2020.
“Mr. President, consistent with the initial burden of the government’s fiscal operations, the government’s financing needs were also anticipated. As noted above, the COVID-19 pandemic has caused a tightening of global financial conditions. Fortunately, our US $ 3 billion international capital market financing took place in the first 2 months of the year. Furthermore, in April 2020 the IMF’s rapid credit line for one billion dollars was also executed, ”he informed the Chamber.
— Starrfm
