Economist, Professor Godfred Bokpin, has cautioned government to be measured in its appetite for borrowing as result of a drop in Ghana’s debt in relation to the size of the economy or Gross Domestic Product (GDP).
"Provisional estimates by the Ghana Statistical Service showed that the country recorded a growth rate of 5.4% in 2021, cutting the debt-to-Gross Domestic Product (GDP) ratio to 74.4%, from the earlier 80.1%."
But speaking to Joy Business on concerns that the decline may push government to borrow more, Prof. Bokpin who is with the University of Ghana warned there is no fiscal space to increase the debt stock.
“We have to be very cautious. The fact that debt-to-GDP ratio has dropped on the strength of higher growth doesn’t necessarily mean that we have the fiscal space to go on borrowing,” he stressed, adding that, “debt-to-GDP ratio in itself is not a comprehensive measure of Ghana’s debt sustainability position”.
Prof. Bokpin explained that a mere look at the baseline interpretation of debt-to-GDP ratio simply shows how the country can pay its debt in a year.
“We need to go beyond debt-to-GDP ratio and look at other indicators of debt sustainability, particularly, liquidity measures”.
Giving some recommendations, he advised that it is important for government to improve its liquidity position through revenue collection.
“This current drop in the debt-to GDP ratio as a result of the expansion is a false hope”, he said.
He maintained that it is time to focus on how the expansion in the economy can be converted into improved tax collection through policies that will impact the productive sectors of the economy.
Touching on the size of Ghana’s external debt stock, Prof. Bokpin advocated a move that will enhance export to help cater for debt.
He suggested that government must add value to export commodities to increase the country’s foreign earnings.
Latest Stories
-
Man remanded for allegedly stabbing businessman with broken bottle and screwdriver
17 mins -
Population in Kumasi Central Prison surges to 1800, threefold exceeding capacity
27 mins -
NPP to conduct La Dadekotopon parliamentary primary today
27 mins -
KPMG’s report on GRA and SML deal, government white paper on report and matters arising
28 mins -
I won’t reply to Chris Brown tour criticism – Ayra Star
30 mins -
British Columbia to back off drug decriminalisation project
38 mins -
Veteran commentator Joe Lartey Sr dies at 96
39 mins -
Livestream: Newsfile discusses KPMG report on SML deal, ILO on SSNIT reserves and NDC’s running mate
1 hour -
Ghanaian activist hugs over 1,100 trees in an hour to set Guinness World Records
1 hour -
Mathew Anim Cudjoe’s Dundee United promoted to Scottish Premiership after Championship win
1 hour -
NSMQ star Jochebed Adwoa Sutherland sweeps 12 awards at UG Vice-Chancellor’s Ceremony
2 hours -
Ghana’s Education Quality ranked 125 out of 183 countries in latest Global Youth Development Index
2 hours -
Emma Stone wants people to use her real first name
3 hours -
Verna Purified Water emerges as ultimate winner at Ghana Beverage Awards 2023
3 hours -
FIFA Club World Cup 2025: Sundowns, Esperance join Al Ahly and Wydad as CAF representatives
6 hours