An Economist and Professor of Finance at the University of Ghana Business School, Godfred Alufar Bokpin, has challenged assertions by Vice President, Dr Mahamudu Bawumia that the current government has managed the country’s debts at a prudent level.

The Vice President, speaking at the regional seminar of the Tertiary Students Confederacy of the NPP (TESCON) at the University of Cape Coast on Saturday, August 7, 2021, said that even though the country’s debt levels have gone up, management of the economy has been efficient.

According to Dr Bawumia, the interest rate, inflation, exchange rate depreciation, and growth have all been managed efficiently. He said this shows remarkable management of the debt levels.

In a reaction to the comments on JoyFM’s Super Morning Show on Monday, August 9, 2021, Prof. Bokpin expressed a varied opinion.

He contends that though the current government may have performed better than the previous administration in terms of handling the country’s debt stock, drawing such comparisons is not a better benchmark. He said if there’s any comparison to be made, it should be between the country’s current economic situation and that of other countries.

“You cannot totally, looking at all the indicators, describe where we find ourselves as prudent debt management. If you look at it in relation to the other macro variables, we have seen some improvement but I think we should not set a trap for ourselves with all these comparisons,” he said.

“When you even look at the debt levels, and here I’m not going to celebrate the debt to GDP ratio because we do know that it doesn’t tell us the entire story. We also want to look at the implication of rising debt, you want to look at debt service to revenue ratio and we want to find out from government, has that improved? will that constitute prudent debt management?.

“The answer will be no, because we are spending more than 50% of our non-oil tax revenue just to service our debt and that is unacceptable by any definition any day any time because when you look at how much we are setting aside just to service the debt, it leaves very little or nothing for the country to spend on,” he said.

He further raised concern over the fact that the country uses 50% of non-oil tax revenue to service debt. In his view, this is unacceptable.

“We should also be looking at it in terms of Ghana’s potential and competition with our peers (other African Countries). When doing that you will realise that we have not made significant progress. When it comes to interest rates, other countries are doing better,” he added.

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