Economist Godfred Bokpin has indicated that the country continues to struggle with managing its current debt Gross Domestic Product ratio, although the government awaits the IMF 3 billion bailout.
According to Professor Bokpin servicing the debt has become a challenge since the borrowed funds were not directly invested into the cash regeneration of the economy.
At a business forum, he says, Ghana’s debt restructuring is different and has generated many controversies.
“Whilst we were talking about 88 per cent, the government was talking about 78 per cent or less. It got to a point our public debt was almost like multiple-choice, choose the one that you like but thankfully when the IMF came to town and they used their debt sustainability framework there was greater clarity, so we were told that our debt to GDP was 105 per cent.
We have borrowed more than the size of our economy. But of course, there’s nothing wrong with borrowing, if you borrow and you invest it in enhancing the cash regeneration capacity of the economy, then servicing the loan will not be a problem but the question is we see the rate of GDP growth, we’ve seen the rate of borrowing and if you do the mathematics you will realise that perhaps we have not invested those borrowed funds productivity efficiently,” Professor Bokpin said.
