That is a wonderful insight, great job we need such pieces most times
That is a wonderful insight, great job we need such pieces most times
AGBEVE AGBENYEGA 7 years ago
This book-long explanation is totally meaningless to the ordinary Ghanaian citizen. What percentage of the Ghanaian populace can understand it? Probably only 5% percent, if not lower. We have all these intellectuals around, y ... read full comment
This book-long explanation is totally meaningless to the ordinary Ghanaian citizen. What percentage of the Ghanaian populace can understand it? Probably only 5% percent, if not lower. We have all these intellectuals around, yet Ghana is suffering!
What the ordinary Ghanaian wants to see is good and reasonably affordable healthcare and education system, security, employment, good and safe roads etc. Not this lengthy bullshit senseless explanation of Debt-to-GDP concept!!
Nii Teiko 7 years ago
74% debt to GDP ratio mean 74 out of 100% of Ghanaians have already been sold to the China, Kuwait and and the United People of Arab Emirates without their knowledge. Folks, be advised that the remaining 26% will be sold ou ... read full comment
74% debt to GDP ratio mean 74 out of 100% of Ghanaians have already been sold to the China, Kuwait and and the United People of Arab Emirates without their knowledge. Folks, be advised that the remaining 26% will be sold out if Mahama is given another 4-year term to continue his borrowing spree. Vote Mahama and the NDC out before we become slaves on our own land.
Nii Teiko 7 years ago
United Arab Emirates not United People of Arab......
United Arab Emirates not United People of Arab......
BOAFO YENA 7 years ago
Dr. Kwame Ofori Asomaning, stay in a room with Mr. Seth Terkoer , the Finance Minister, and Dr. Mahamudu Bawumia, the noted economist, and let them give you feedbacks on what you have so clearly explained concerning this deb ... read full comment
Dr. Kwame Ofori Asomaning, stay in a room with Mr. Seth Terkoer , the Finance Minister, and Dr. Mahamudu Bawumia, the noted economist, and let them give you feedbacks on what you have so clearly explained concerning this debt-to-GDP paradox. You are right, the debt-to-GDP ratio is a "deceitful statistic" many Ghanaians don't understand.
AMANKONA KWASI, BEREKUM 7 years ago
Boafo Yena, no matter what explanation one may offer, 74% Debt-to-GDP ratio is too dangerous and indefensible!! It's just common sense! Tekper and his govt should confront the reality and come up with pragmatic policies to fi ... read full comment
Boafo Yena, no matter what explanation one may offer, 74% Debt-to-GDP ratio is too dangerous and indefensible!! It's just common sense! Tekper and his govt should confront the reality and come up with pragmatic policies to fix the economy. We shouldn't run away from the problem.
Osei Boakye 7 years ago
What is Dr. Bawumia's explanation of this debt-to-GDP ratio the average Ghanaian have problem understanding?
Failure to understand it is part of the problem.
What is Dr. Bawumia's explanation of this debt-to-GDP ratio the average Ghanaian have problem understanding?
Failure to understand it is part of the problem.
Kwei 7 years ago
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read hi ... read full comment
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read his argument in the paragraphs below:
In Ghana’s case, the GDP figures has been shrinking since 2011, falling from 14% to 4% in 2015. Thus, because the denominator (GDP) has shrunk, the ratio will definitely go up, and yet there is no sign that the government is unable to pay its domestic debt or any likelihood of default.
Ghana lost a huge chunk of GDP from 14% to 4% probably because the government has been pursuing an austerity program over these years. Such a policy tends to have a double negative effect on the ratio because when the economy goes into a recession, it magnifies the ratio; and if the economy doesn’t recover, it reduces the denominator by a big chunk, causing the ratio to balloon even further.
K Mensah 7 years ago
Nonsense why have you ignored productivity.Are you suggesting that the Government can just print cedis to pay its domestic debts?
Nonsense why have you ignored productivity.Are you suggesting that the Government can just print cedis to pay its domestic debts?
CICERO 7 years ago
This so-called doctor of economies is just full of bullshit and obfuscation. Such disingenuity and academic mischief.
He tries a meaningless and unsustainable distinction between domestic debt and foreign, all in a politic ... read full comment
This so-called doctor of economies is just full of bullshit and obfuscation. Such disingenuity and academic mischief.
He tries a meaningless and unsustainable distinction between domestic debt and foreign, all in a political juggling to extricate Tekper and the dead goat Mahama the Mahamafias from their irresponsible and reckless penchant for borrowing both domestic and externally to satisfy their create, loot and share.
101 economics will tell you that excess borrowing over revenue in a financial period could be unsustainable and it impedes growth and development.
This bogaloo economicic analysis is just an attempt to justify the government's excessive borrowing and sadly these borrowing are scarcely utilized to increase investment and productivity.
In reference to govt not defaulting on its domestic debts is tantamount to quantitative easing as adopted by a number of countries during the recent financial crisis and which has failed woefully to resuscitate the ailing world economies
Debt to GDP ratio is still relevant and still a veritable measure of govt's prudence in managing an economy.
One cannot spend what one doesn't have; simple commonsense; something that seems to have eluded the Mahamafias in their looting spree
Osei Boakye 7 years ago
You can't excuse IMF & foreign companies who use dollars in their calculations.
You can't excuse IMF & foreign companies who use dollars in their calculations.
Ben 7 years ago
This is a very warped economic postulation by the author; he comes across as insightful but unfortunately he is thinking like political dictator Idi Amin who thought that the Central Bank is all about printing currency.
I w ... read full comment
This is a very warped economic postulation by the author; he comes across as insightful but unfortunately he is thinking like political dictator Idi Amin who thought that the Central Bank is all about printing currency.
I wonder what of economic analysis would easily forget about liquidity and its attendant effect on productivity and crowding out of the private sector.
I am highly disappointed in the author of this article for posting such a misleading, convoluted, mishmash of arguments.
Prof Lungu 7 years ago
Insightful, with some very educative ideas for those unfamiliar with some of the concepts.
We are no economists.
However, we are thinking "Debt-to-GDP" ratio may also not be just a "deceitful statistic" as it is a polit ... read full comment
Insightful, with some very educative ideas for those unfamiliar with some of the concepts.
We are no economists.
However, we are thinking "Debt-to-GDP" ratio may also not be just a "deceitful statistic" as it is a political strategy by countries to control other countries.
Case in point - case of Ghana:
When Kwame Nkrumah was overthrown in 1966, Ghana's Debt-to-GDP was under 30%. Yet, the US, UK, and a traitor bunch (Ankrah-Harlley-Afrifa-Kotoka, etc.) proffered that as an excuse, Kwame Nkrumah "bankrupted" Ghana, forgetting the development that was bought with funds for projects. In the year or so preceding the coup d'état, the West withdrew all support, including buying less products from Ghana. Further, they had engineered downward the price of cocoa on the world market, and then some
Coincidentally, for Britain the Debt-to-GDP in 1966 was higher than 50%, according to our data. Yet, and it had been a lot higher throughout the 1940s/1950s.
So today, Ghana, we hear, is at 74%.
Go figure!
Our thanks to Kwame Ofori Asomaning for this essay. They make a global case using Ghana as an example.
It is up to critical minds to do whatever they want with that perspective.
Greetings!
Truth Seeker 7 years ago
Asomaning has tried to assuage the fears of Ghanaians that domestic debt isn't a phenomenon to be worried about since government can always print cedis to pay it's debt. My reservations is where he seeks to justify governme ... read full comment
Asomaning has tried to assuage the fears of Ghanaians that domestic debt isn't a phenomenon to be worried about since government can always print cedis to pay it's debt. My reservations is where he seeks to justify governments ability to always print currency to fulfill it's financial obligations as pertains in USA and Japan. My simple question for Asomaning is why The American and Japanese governments do not owe the local contractors for more than a month after completion of their jobs ,where as the Ghanaian government is owing contractors for more than two years. ? If Asomaning's postulation about domestic debt is anything to go by, the current government should have settled it's accruals to road contractors a long time ago.
Baffour 7 years ago
Very happy with those who have put Asomaning where he rightly belongs, an ignorant person postulating knowledge. Domestic debt does not matter my foot. It belongs to the camp of the Iddi Skins and Kutu Acheampongs.
Very happy with those who have put Asomaning where he rightly belongs, an ignorant person postulating knowledge. Domestic debt does not matter my foot. It belongs to the camp of the Iddi Skins and Kutu Acheampongs.
J.A 7 years ago
Your piece sounds convincing, however , the postulated debt//tax ratio for determining debt sustainability and thus the health of an economy may prove unreliable and even misleading.An effective tax regime is largely determin ... read full comment
Your piece sounds convincing, however , the postulated debt//tax ratio for determining debt sustainability and thus the health of an economy may prove unreliable and even misleading.An effective tax regime is largely determinable by the rates involved and their applicability (enforcement and ease of compliance) such that fiscal revenue will be nebulous as to not reliably inform us of the size of the economy, let alone its good health or otherwise.So, why go for taxation - a small subset of GDP, in all probability- rather than GDP itself in a bid to establish an important metric relative to a country's debt burden?
The second point is about the fact that printing domestic currency to finance treasury securities could be as devastating as imaginable. Its net effect of saddling a country with worthless paper notes fuelled largely by hyperinflation and seemingly runaway currency depreciation, as such funds streaming out of the press tend to be applied on steeply unproductive activities with reckless abandon. We aver then that much as the ubiquitous debt to GDP ratio may not be perfect, it is instructively a better option.
On a good note, your feature is thought provoking and hence worthy reminder that we need not take things for granted.
J. Aggiyem 7 years ago
The name is J.A. Aggiyem
The name is J.A. Aggiyem
Kwei 7 years ago
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read h ... read full comment
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read his argument in the paragraphs below:
In Ghana’s case, the GDP figures has been shrinking since 2011, falling from 14% to 4% in 2015. Thus, because the denominator (GDP) has shrunk, the ratio will definitely go up, and yet there is no sign that the government is unable to pay its domestic debt or any likelihood of default.
Ghana lost a huge chunk of GDP from 14% to 4% probably because the government has been pursuing an austerity program over these years. Such a policy tends to have a double negative effect on the ratio because when the economy goes into a recession, it magnifies the ratio; and if the economy doesn’t recover, it reduces the denominator by a big chunk, causing the ratio to balloon even further.
That is a wonderful insight, great job we need such pieces most times
This book-long explanation is totally meaningless to the ordinary Ghanaian citizen. What percentage of the Ghanaian populace can understand it? Probably only 5% percent, if not lower. We have all these intellectuals around, y ...
read full comment
74% debt to GDP ratio mean 74 out of 100% of Ghanaians have already been sold to the China, Kuwait and and the United People of Arab Emirates without their knowledge. Folks, be advised that the remaining 26% will be sold ou ...
read full comment
United Arab Emirates not United People of Arab......
Dr. Kwame Ofori Asomaning, stay in a room with Mr. Seth Terkoer , the Finance Minister, and Dr. Mahamudu Bawumia, the noted economist, and let them give you feedbacks on what you have so clearly explained concerning this deb ...
read full comment
Boafo Yena, no matter what explanation one may offer, 74% Debt-to-GDP ratio is too dangerous and indefensible!! It's just common sense! Tekper and his govt should confront the reality and come up with pragmatic policies to fi ...
read full comment
What is Dr. Bawumia's explanation of this debt-to-GDP ratio the average Ghanaian have problem understanding?
Failure to understand it is part of the problem.
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read hi ...
read full comment
Nonsense why have you ignored productivity.Are you suggesting that the Government can just print cedis to pay its domestic debts?
This so-called doctor of economies is just full of bullshit and obfuscation. Such disingenuity and academic mischief.
He tries a meaningless and unsustainable distinction between domestic debt and foreign, all in a politic ...
read full comment
You can't excuse IMF & foreign companies who use dollars in their calculations.
This is a very warped economic postulation by the author; he comes across as insightful but unfortunately he is thinking like political dictator Idi Amin who thought that the Central Bank is all about printing currency.
I w ...
read full comment
Insightful, with some very educative ideas for those unfamiliar with some of the concepts.
We are no economists.
However, we are thinking "Debt-to-GDP" ratio may also not be just a "deceitful statistic" as it is a polit ...
read full comment
Asomaning has tried to assuage the fears of Ghanaians that domestic debt isn't a phenomenon to be worried about since government can always print cedis to pay it's debt. My reservations is where he seeks to justify governme ...
read full comment
Very happy with those who have put Asomaning where he rightly belongs, an ignorant person postulating knowledge. Domestic debt does not matter my foot. It belongs to the camp of the Iddi Skins and Kutu Acheampongs.
Your piece sounds convincing, however , the postulated debt//tax ratio for determining debt sustainability and thus the health of an economy may prove unreliable and even misleading.An effective tax regime is largely determin ...
read full comment
The name is J.A. Aggiyem
Don't mislead people when you don't understand basic economic principles or math.
Ghana's GDP has grown or expanded over years. A declining growth rate only means the country's GDP is expanding at a slower rate.
Read h ...
read full comment