Government is advancing a new strategy to salvage the economy.
Pundit have attributed the fall of the Ghanaian economy to the extreme interest charged by credit facilities.
In an effort normalize the economy, Vice – President Dr Mahamudu Bawumia has laid down steps to reduce the ailing effects of traditional forms of loan pressures through debt reprofiling.
Reprofiling means lengthening the maturity of bonds while preserving principal and generally the coupons.
This move eases the pressure on government by allowing more time to reduce the nation’s debt and improve the economy.
Speaking at an event on Easter Monday he said, ‘‘last Friday, Ghana issued a bond essentially to do debt re-profiling and in that context, we raised some US$2.25 billion investment that came in to buy this cedi dominated bond’.
He also noted that the transaction further advantages the nation as more foreign exchange is got without adding to our debts.
Charles Adu Boahen, Deputy Finance Minister also expressed worry about the country’s burden to raise a billion cedis weekly to recompense its debt.
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‘‘Piling up debt is very damaging to every economy; thus, the key reason to restructure our debt is that the economic situation remains unstable’’ he said.
Dr Bawumia has recognised the danger in default through his quest to stabilise the economy, hence, taking the crucial decision.
The prevailing condition of borrowings has raised fears that the new government is going to borrow more for debt servicing but it seems there is a strategy to minimise it.
This new strategy by the vice president would mellow the fears of most Ghanaians who thought the NPP government would embark on a borrowing spree to service its debt.