Ghana is on the brink of a severe financial crisis expected to hit early in 2025, according to a projection by financial analyst, economist, and historian Scott Bolshevik.
In a post on X (formerly Twitter) dated July 12, 2024, Bolshevik warned Ghanaians to prepare for significant economic turbulence, citing the government’s current inability to service foreign debt and the impending depreciation of the cedi.
Bolshevik highlighted that the government is employing short-term measures to mask deeper economic issues, particularly in the context of the upcoming elections.
These measures, he noted, are not addressing the underlying problems, thereby setting the stage for a more profound financial crisis in the near future.
Depreciation of the Cedi: Bolshevik projected a significant depreciation of the cedi in 2025. The value of the cedi has been under pressure due to various factors, including high inflation rates, trade imbalances, and reduced foreign exchange reserves. A depreciating cedi can lead to higher import costs, which can drive up the prices of goods and services, further burdening the already struggling populace.
Foreign Debt Servicing: The Ghanaian government has ceased servicing its foreign debt, a critical indicator of financial distress. The suspension of debt servicing can lead to a loss of investor confidence, making it more challenging for the country to secure future loans or investments. This could exacerbate the country’s fiscal deficit and limit its ability to fund essential services and infrastructure projects.