A former Deputy Finance Minister and Member of Parliament for Obuasi West in the Ashanti Region, Kwaku Kwarteng has likened the management of Ghana's economy to a Ponzi scheme.

According to him, the current economic challenges at both national and household levels stem from decades of poor governance, marked by political mismanagement and economic inefficiency across various administrations.

Mr Kwarteng made these comments in a statement issued on Thursday, July 25, captioned "To break the eight, we must first break the norm", in what looks like a direct piece of advice to his party the governing New Patriotic Party (NPP), and by extension all political parties.

• Read also: Kwaku Kwarteng: To break-the-eight; we must first break the norm

The immediate past chairman of the Finance Committee in Parliament pointed out that since gaining independence, Ghana has consistently spent beyond its means and relied on borrowing to cover the excess.

He emphasised that many of these expenditures are poorly prioritized.

“We always offer higher interest to lenders, borrow more, use a part to repay previous debts, and the rest to pay for the current year’s overspending. So, we have been running our country’s economy like a Ponzi scheme. The economy is struggling today because lenders are now refusing to lend to us. It is just like a Ponzi scheme going into crisis once people stop depositing their monies with them.”

The Obuasi West MP stated that many Ghanaians, including himself, are concerned that if Ghana continues on its current path, its democracy could collapse, along with all political parties.

He emphasised that to save the country from this looming danger, the political class must acknowledge this reality and change their behaviour, as time is running out for Ghana.

“Since independence, the political norm has been that a political party going into an election must sing praises of its past achievements and make high-sounding promises for the future. At the same time, a political party must paint its opponents in the worst possible light. We have mastered this art, and in the process, we have forgotten that politics should be about the future of our children and our motherland. We have reduced election campaigns to bitter struggles between competitors seeking power for the wrong reasons.”

Ghana’s public debt rises to GH¢742bn

During the recent presentation of the mid-year budget review to Parliament, the Finance Minister, Dr Mohammed Amin Adam, revealed that as of the end of June 2024, Ghana's debt had reached GH¢742.0 billion (US$50.9 billion).

This is equivalent to 70.6 per cent of the country's Gross Domestic Product (GDP). He said, “This indicates an increase of 22.0 percent due to the effect of the cedi depreciation and the continuous disbursements from creditors."

He explained that out of the total debt, GH¢452.0 billion was external debt, making up 60.9 percent, while GH¢290.0 billion was domestic debt, accounting for 39.1 percent.

“As a percentage of GDP, external and domestic debt represented 43.0 percent and 27.6 percent, respectively,” he said.