Ghana’s debt to GDP to hit 90% by end of 2022 – Ato Forson

Former Deputy Finance Minister, Dr. Cassiel Ato Forson has accused the Akufo-Addo government of running the economy down with “reckless” borrowing.

The MP for Ejumako-Enyan-Essiam observed that the government, despite touting competent men to run the economy prior to assuming office in 2017, has exhibited gross incompetence in managing the finances of the country.

Speaking on Gumbe Show on TV XYZ on the sidelines of the Mid-year Budget review by Finance Minister, Ken Ofori-Atta, the Minority spokesman on Finance pointed out the fact that the government was clueless about smart borrowing which will inure to the benefit of the country.

He also alleged that it was for that reason that the government has to encourage the Bank of Ghana to print an amount of GH¢22 billion without Parliamentary approval as a face-saving mechanism to shore the economy which is already melting down.

According to him, the fresh currency notes were printed between January and June 2022.

The information, according to Dr. Forson, is hidden on page 97 of Appendix 2a of the Mid-year budget under the section on the Bank of Ghana.

“When we were (the NDC) leaving office, the country’s public debt as a percentage to GDP was 57% but today as I speak, we will hit 90% by the end of this year,” Dr. Forson told the host Mugabe Maase.

He said the debt to GDP was 83.4 percent in December last year but if the government goes on to borrow anyhow, the debt will be 100 percent of GDP by the end of 2023.

Ghana’s debt to Gross Domestic Product (GDP), according to Bloomberg, is estimated at 84.6% by the end of this year.

Ato Forson’s concerns come after a Bloomberg study ranked Ghana 2nd among countries with the highest debt default risk in 2022.

The country closely followed El Salvador (ranked number one) in the Sovereign Debt Vulnerability Ranking.

This indicates that the nation’s debt would have surpassed ¢400 billion by far before the end of 2022.

As of the first quarter of 2021, Ghana’s public debt had hit ¢391 billion (US$50.3 billion), the Bank of Ghana reported. As much as ¢40.1 billion was added to the debt stock, largely as a result of exchange rate fluctuation.