Banking Consultant, Dr. Richmond Atuahene, has expressed his concern that Ghanaians are bearing an excessive financial burden when it comes to repaying government loans.
He pointed out that this situation arises because the government borrows primarily for expenditure rather than strategic investment in projects.
Dr. Atuahene emphasized the importance of the government maintaining prudent borrowing practices to ensure it stays within its fiscal limits.
During his presentation at the Ghana Economic Forum in Accra on Tuesday, October 11, 2023, he also called for a revision of the 1992 Constitution to establish a ceiling on the government’s borrowing capacity.
Mr Atuahene said, “Ghana as a country, must from today, begin to look at the constitution. Inside the constitution, according to literature from IMF, the United Nations in 2014, the debt to GDP of any developing country should not exceed 50 percent and developed countries are given a leeway of 60 percent.”
“We find ourselves in this position because we have a constitution that has no business of setting a debt cap like the Americans have it. When the Americans had the cap and they had trouble they had to go to Congress and when they go to Congress you will see how they suffer. So we need to come to the constitution and amend it as soon as possible,” he stated.
Mr Atuahene added that, “This is one of the shortest strategies that I will recommend so that we don’t find ourselves in such a situation ever again, borrowing and borrowing for consumption. As I have always said, you will pay through the nose, and Ghanaians repaying through the nose.”
As of June this year, Ghana’s public debt reached GH¢575.5 billion, equivalent to 71.9% of the Gross Domestic Product (GDP). This marked a slight increase of GH¢6.3 billion compared to the GH¢569.2 billion reported in April 2023.
The Bank of Ghana’s Summary of Economic and Financial Data for September 2023 reveals that the country’s public debt has expanded by GH¢27.7 billion since January 2023.
In terms of US dollars, the total debt amounted to US$52.3 billion as of June 2023. External debt accounted for GH¢328.6 billion (equivalent to US$29.9 billion), while domestic debt accounted for GH¢246.9 billion (approximately $30.8 billion).