Associate Professor and Dean of International Programmes Office at the University of Ghana has said that Ghana's current debt stock is likely to have an adverse effect on the economy if proper measures are not instituted to manage the situation.
Prof. Eric Osei-Assibey said Ghana is likely to be faced with a myriad of economic challenges including high inflation rates, increased fiscal deficits among others, if monies borrowed are not properly utilised.
"What is going to happen is that the country's interest payments will go up and this in turn will lead to limited fiscal space to spend on areas that will directly benefit the people," he said.
His comment comes as part of discussions on the impact of Ghana's debt stock on the economy.
Ghana's debt stock
Ghana’s public debt stock hit ¢273.8 billion, about 71% of Gross Domestic Product in September 2020, according to the November 2020 Summary of Financial and Economic Data by the Bank of Ghana.
This is equivalent to $48 billion.
Between July and September 2020, the nation added ¢10.7 billion to its public debt stock.
The rising debt though a worry has been precipitated by the impact of covid-19 whereby the nation had to borrow extra to finance the budget and also support Micro, Small and Medium Scale Enterprises who were heavily impacted by covid-19.
Following this occurrence, the Professor noted that borrowing in itself is inevitable in every economy.
However, if monies contracted are spent more on consumption other than productive sectors of the economy, the country will be compelled to engage in more borrowing to support various sectors.
"In that case, your growth can be confounded to the extent that the private sector and individuals will not get access to loans that will help to expand the productive livers of the economy," he said.
Latest Stories
-
We have enough funds to pay accruing benefits; we’ve never missed pension payment since 1991 – SSNIT
10 mins -
Let’s embrace shared vision and propel National Banking College – First Deputy Governor
46 mins -
Liverpool agree compensation deal with Feyenoord for Slot
53 mins -
Ejisu by-election: There’s no evidence of NPP engaging in vote-buying – Ahiagbah
59 mins -
Ejisu by-election: Independent ex-NPP MP’s campaign team warns party against dubious tactics
1 hour -
ZEN Petroleum supports Tse-Addo Future Leaders School
2 hours -
NPP must win back Adentan seat in 2024 polls – Obeng Fosu
2 hours -
PPA Clarification: The dark side of the World Bank’s ‘giveaways’ in Ghana by Bright Simons
3 hours -
Blinken says China helping fuel Russian threat to Ukraine
4 hours -
MHA declares May as Purple Month for Mental Health Awareness
4 hours -
WAEC arrests former headmaster over illegal students registration
5 hours -
MeToo founder Tarana Burke defiant after Harvey Weinstein ruling
5 hours -
Be alert, insist on decent messages – Dwumfour tells media
5 hours -
Father jailed 10 years for burning daughter’s genitals with hot cutlasses
5 hours -
I aim to help Ghana produce world-class athletes – Asamoah Gyan
5 hours