Former Member of Parliament for Offinso North, former Minister and astute economist, Dr. Kofi Konadu Apraku, has admitted Ghana’s debt to GDP ratio makes her a highly indebted poor country.
According to him, the debt to GPD of more than 70% is too high and stressed he is not personally making that claim but it is the numbers that he is speaking.
“If the public debt is over 70% of the GDP, then the country is declared as a HIPC country,” he stated.
Dr. Apraku who is currently the ECOWAS Commissioner for Macro-Economic Policy and Economic Research disclosed these on Oyerepa TV’s My Signature programme.
According to him, comparing the condition of the Ghanaian economy today, 2022 with the prevailing situation in 2004 when Ghana was compelled to join the HIPC Initiative, it is the same.
President Kufuor, he said, made the difficult decision because of the stigma associated with such declaration and declared Ghana HIPC in 2004.
He averred that the decision, though unpopular, brought in the much-needed resource to stabilize the economy and prompt growth.
Dr. Apraku argued the present situation is no different and certainly not good because Ghana is accumulating debt that it cannot generate enough resources to pay.
“We don’t have money to pay our debts so if you go in for more loans how do you pay your debts? Basically, Ghana is borrowing to live today on a daily basis. You thank God for what you receive and spend today, and then tomorrow you go asking for another.”
“You don’t even have the funds to invest into revenue-generating activities,” he stated.
“If you work and at the end of the month you are paid $100 and yet you need $150 to take care of your household for the month, then you are indebted because, at the end of the month, you need to go and pay the debt of $50. So you can never save any money.”
“The nation is just like a human; her savings is what she uses for investment and provision of public services, amenities and developing human capital. At a point she cannot get more loans because her savings cannot even pay her outstanding debts,” he added.
The former MP and Minister averred that though the economy started very well in 2017 and was making progress, a number of factors with COVID-19 being the biggest culprit have shattered all the work that has been done to stabilize it.
According to him, this is not limited to only Ghana but a prevailing situation with almost all the countries in the ECOWAS sub-region that have suffered shocks because of the pandemic.
Dr. Apraku noted, however, that the best that could come out of the pandemic should be the realization of a need to build a stronger and resilient economy to be able to withstand shocks, be they internal or external.
He averred that before the pandemic hit, Ghana’s economy was one of the strongest in the sub-region and indicated, however, that the current situation does not bode well for comfort with the mounting debt.
He argued that in the first term of the Akufo-Addo government, the administration did extremely well and though, it cannot claim to have addressed all the challenges of the economy, there were tell-tale signs of progress with inflation going down and economic growth picking up significantly.
“The economy was headed in the right direction. Though the government could not claim to have solved all the problems there was significant progress that was evident in the lives of those in the country.”
“The entire economy, however, collapsed completely when COVID struck, which is why we have to almost start all over again,” he stated.
He observed that the problem of the West African economy including Ghana’s, is its lack of resilience hence the smallest shock and the entire state is in turmoil.
That, he added, should be the preoccupation of the government and how to strengthen the economic fundamentals.
Source: Mypublisher24.com