Feature: Debt to GDP, debt stock and matters arising

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• Kwabenaghana 6 years ago

  Folks, the Bottom of the problem is that our economy is not productive enough..We have too many people only talking and consuming from the National purse without adding anything meaningful to the economy. Only speaking big en ...
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  Folks, the Bottom of the problem is that our economy is not productive enough..We have too many people only talking and consuming from the National purse without adding anything meaningful to the economy. Only speaking big english and sweet talks cannot help us to develope. All the money we have been borrowing should go into sustainable industrialisation and productivity of the products that we consume. That is the only Way we can create jobs for the masses and also export processed goods to the world market to earn foreign exchange to pay the loans back. Our incapable leaders are doing too much talking without producing anything. It is the famers and the poor tax payers who keep on financing their lavish Lifestyles.

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• BOY KOFI 6 years ago

  GDP is not what govt borrowed from creditors and they don't care about your debt ratio to GDP.You always have to pay back your debt in cash or goods even if you extend the time.There's no way your debt stock will reduce even ...
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  GDP is not what govt borrowed from creditors and they don't care about your debt ratio to GDP.You always have to pay back your debt in cash or goods even if you extend the time.There's no way your debt stock will reduce even if you renegotiate to pay all at once because contract is a contract.The creditor will always demand the original amount borrowed plus interest.
  On the contrary,you may demand some fiscal space,that's some room to reduce the agreed amount and the time limit.
  We all know that the longer you take to pay your debt the more interest you pay.
  Then again if you borrow another money to pay old debt,you haven't in anyway reduced the debt stock.You have only cleared the old debt and replace it with a new debt and this also comes with interest depending on the time limit.
  Automatically,your debt stock will go even higher or maybe double if you opt for long duration of payment.
  You don't have to be an economist to know this,even an illiterate knows this fact.I wonder what Bawumia takes Ghanaians for.It's so unfortunate that some well educated people go about fooling people with GDP ratio.We are talking about debt stock that we have to pay but not about GDP.Was it not the same Bawumia who rubbished the 13% growth in 2011?Thank you.

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• Amen 6 years ago

  I think government is not saying they are reducing the debt stock, that is not the case, instead what government is saying is that the debt Burden is being reduced. So borrowing cheap now to retire old expensive debts means ...
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  I think government is not saying they are reducing the debt stock, that is not the case, instead what government is saying is that the debt Burden is being reduced. So borrowing cheap now to retire old expensive debts means that you save on higher interest cost that would have accrued with the old expensive debts and borrowing cheap now allows you to get lower interest cost and longer maturity. This strategy allows you fiscal space that otherwise was constrained and also ensure that the debt BURDEN is curtailed. The point government makes is that the debt burden is reduced as they hope to use the fiscal space so created with retiring expensive debts with cheap loans hence allowing government spending that goes to fuel the consumption and GDP growth from which more monies or taxes from an growing GDP can be generated to pay other expensive debts, this cycle is what will repeat many times to create a snowball effect as other factors like interest rate falls along side as added benefit for the smart borrowing strategy further lessening the debt Burden, not necessarily the debt stock but the interest cost as well.

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• BOY KOFI 6 years ago

  We are talking about borrowing and debt stock but not burden.The question from Bernard Avle was why the new govt's appetite for borrowing because they accused the past govt of borrowing.
  No matter how you look at it,the debt ...
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  We are talking about borrowing and debt stock but not burden.The question from Bernard Avle was why the new govt's appetite for borrowing because they accused the past govt of borrowing.
  No matter how you look at it,the debt stock is increasing because we continue to borrow.
  On the contrary,I do agree with you that the burden may reduce because the govt has opted for longer period of time to repay the debt.Mind you,the longer you pay your debt the interest becomes higer so the debt stock increases.On the real economy,you have not achieved anything yet because the cedi becomes very weak and triggers high cost of goods.Creating a fiscal space doesn't mean your productivity will go up.That's the more reason why govt couldn't hit its target in the first quarter of the year.Thank you.

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• kw 6 years ago

  We were told that,Ghana has a lot of money in the country but because of mismanagement that is why then government led JDM was borrowing. Sincerely speaking some of thought that,if government change, borrowing would a thing o ...
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  We were told that,Ghana has a lot of money in the country but because of mismanagement that is why then government led JDM was borrowing. Sincerely speaking some of thought that,if government change, borrowing would a thing of the past or better still at very minimal level.

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