Ghana is currently facing an economic crisis due to its high public debt, which is estimated to be GHC576 billion (US$45 billion) as of November 2022. The country has been struggling to repay its debt obligations, and its government has been trying to restructure its debt by asking local bondholders to exchange old debt for new bonds that pay lower interest rates.
This move is expected to help the country save money on debt servicing and provide some relief to the government’s strained finances.
In his State of the Nation Address on March 8, 2023, Ghana’s President Nana Akufo-Addo defended his government’s borrowing and spending practices.
He stated that his government has not been reckless in borrowing and spending and that the debts they are servicing were not only contracted during his administration.
Akufo-Addo pointed out that his government has spent prudently on urgent needs of the country, such as roads, bridges, schools, and social protection programs.
The President acknowledged the need to improve the state of the country’s infrastructure and to invest in education and healthcare to help equip Ghana’s young people to compete in the global economy. He also spoke of the need to build more drains to cope with the rainy season and the lack of access to potable water in many rural areas of the country.
Akufo-Addo stated that he is proud of the work his government has done in agriculture, education, health, irrigation, roads, rails, ports, airports, sea defence, digitisation, social protection programmes, industrialisation, and tourism.
However, the President’s defence of his government’s borrowing and spending practices is unlikely to assuage concerns about Ghana’s economic future. The country’s public debt has been rising steadily over the past decade, and the recent economic downturn has only made the situation worse.
Ghana’s economy is heavily reliant on commodity exports, such as gold and oil, and the recent slump in global commodity prices has hit the country hard.
source: norvanreports