The country’s percentage of revenue to service loans has jumped from 12.5% in 2011 to an alarming 44.6% at the end of 2020.

This has denied certain critical sectors of the economy, such as hospitals, schools and roads significant infrastructure development. Indeed, in the 2021 Budget, government capital expenditure is estimated at a paltry 4.0% of Gross Domestic Product.

Also, the country’s percentage of revenue to service loans is projected to hit almost half of total revenue soon if government appetite for borrowing does not stop.

To this end, economist with the Institute for Fiscal Studies, Dr. Said Boakye says the economy is sitting on a time bomb.

He told Joy Business that the situation of the economy is so dire that anything unpleasant can happen to it if care is not taken, blaming the present and immediate past governments for this troubling situation.

“The sad news is that interest payment is not only the total cost of debt service but it includes amortization; together it is now over 70%. There are so many other expenditures – how can you develop with all your revenues – you are using it eventually the biggest chunk of your revenue to service your debt”

On whether, the economy has reached a dangerous pointe whereby if care is not taken may collapse, Dr. Boakye said “when it happens [economy failure] if you are not careful you will not see it. In fact in the 1970, the economy eventually crashed but people were there. What will happen is that the government can no more increase salaries, we cannot expand the road network. It has begun to crush because the last time debt service took revenue ratio to exceed 70% was in the year 2000; this country was rescued by HIPC.

This year, the government will spend about GH¢35.8 billion on interest payment alone.

However, tax and non-tax revenue is estimated at GH¢70.9 billion.