The current economic condition in Ghana will lead to a debt crisis, according to Steve Hanke, a professor of Applied Economics at Johns Hopkins University in the United States.
Hanke, who has shown a particular interest in shedding light on the world’s economic troubles, claimed that Ghana is facing an impending debt catastrophe, which has led the nation to potentially seek economic assistance from the IMF for a 17th time.
The government revealed plans for a domestic debt exchange program on December 5, which will let bondholders freely exchange their notes for new ones.
The move meant that Ghana is inviting eligible holders to exchange GH¢137.3 billion of the domestic notes and bonds, including Energy Sector Levy Act Plc and Daakye Trust Plc, for a package of New Bonds to be issued.
Following the announcement, Prof. Hanke on his Twitter expressed further concern about Ghana’s local currency which he noted has depreciated by 56 percent since 2020.
He further described Ghana’s local currency as ‘junk’ – meaning the cedi’s value is unreliable on both the international and domestic markets.
“A debt crisis looms on the horizon in #Ghana. Since January 1st, 2020, the #cedi has depreciated ∼56%. Thanks to Ghana, my rogue’s gallery of JUNK CURRENCIES just keeps growing,” he wrote on December 4, 2022.