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General News of Tuesday, 27 July 2021


Ghana’s economy is in crisis – Eric Opoku

Member of Parliament for Asunafo South, Eric Opoku Member of Parliament for Asunafo South, Eric Opoku

Member of Parliament for Asunafo South, Mr Eric Opoku has lamented the loans the Akufo-Addo government has taken so far, ballooning the public debt stock.

The Minority has pegged the debt of the Akufo-Addo administration as GHS180 billion which they say is about 60% of the country’s total public debt since independence.

Speaking to Prince Minkah on XYZ Tonight, the former Brong Ahafo Regional Minister noted that the loans the government takes are used for consumption unlike the erstwhile Mahama administration.

“Loans are the only means of paying civil servants today…The economy is in crisis because we only go for loans to feed the citizens,” Mr Opoku added.

To him, the economic indicators show that the country is heading in the wrong direction, adding “no data can prove that this economy is good unless the figures are massaged.”

His concerns come after the Minority Ranking Member on the Finance Committee of Parliament, Dr. Cassiel Ato Forson, cautioned that Ghana could fail to meet its debt service obligations if urgent steps are not taken to seek debt relief.

The MP was speaking at a Policy Dialogue held at the University of Professional Studies, Accra when he gave the caution.

He said the current debt profile of the country made it unsustainable and was putting severe pressure on the nation’s finances, making it difficult to meet debt service deadlines while meeting other expenditure commitments at the same time.

Dr. Forson said available figures showed that up to 87% of government tax revenue goes into debt servicing which is the payment of interest and amortization alone, leaving very little for investment in critical sectors of the economy.

This he said, would worsen if the current borrowing situation continued into the foreseeable future.

“The Akufo-Addo/Bawumia government must seek urgent debt relief from the International Monetary Fund (IMF) through the newly proposed Debt Relief Initiative, known as the Common Framework for Debt Treatments Beyond the Debt Service Suspension Initiative (DSSI), which can be likened to the HIPC Initiative,” Dr. Forson said at the event attended by a cross-section of Minority MPs and some academics drawn from various universities in the capital.

He added that “failure by the Akufo-Addo/Bawumia government to do as recommended, within the next 18 months, would expose Ghana to a high risk of default on its debt service obligations which will plunge the country into much deeper economic crisis”.

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