Current economic challenges due to external factors – Deputy Finance Minister

Deputy Minister of Minister, Dr. John Kumah, has maintained that the current economic headwinds in the country are largely due to external factors.

According to him, the said external factors have impacted the country’s debt position and have therefore compelled government to roll out a debt restructuring programme.

Speaking in an interview on Accra-based Citi TV, the deputy finance minister said Ghana's debt situation has worsened due to the outbreak of the Coronavirus pandemic and the Russia-Ukraine war in the last two years.

“We got here through very difficult global circumstances. The economy was doing well before COVID-19 struck and when Covid came, it did not only hit Ghana, it hit the entire world and there were disruptions in supply chains, the introduction of lockdowns, and things generally became expensive, and even now that we are out of the pandemic, one of the symptoms of COVID-19 in every country is high inflation rates. In Ghana, for example, we have seen how inflation levels have shot up from 12 percent to 40.4 percent in October," he is quoted by Citinewsroom.com

“Unfortunately, we were further hit in 2022 by the needless war in Russia and Ukraine which affected energy and that has led to increases in the prices of fuel at the pumps. The 'trotro' driver has to pay more and translated that into increases in fares for passengers and for everyone,” the deputy finance minister added.

Touching on the proposed debt exchange programme, Dr. John Kumah said the decision was arrived at as part of requirements with the International Monetary Fund to access an economic support programme.

“Any objective observer will tell you that, globally, we are heading toward a recession and that means further difficult situations for everyone, so we have to do something and that is why Ghana is making processes to get a program with the International Monetary Fund (IMF) and one of the conditions to meet the Fund’s program is debt sustainability.”

MA/FNOQ