Pulse.com.gh logo
Go


Debt crisis Ghana's debt hits pre-HIPC stage- IMF

Per analysis done by the Ghana News Agency,  Ghana's debt at the time of joining the Highly Indebted Poor Country (HIPC) initiative in April 2001 was 6,025.6 million dollars (about 24 million Ghana cedis currently). Debt-to-GDP ratio then was about 110 percent.

  • Published:
Finance Minister, Seth Terkper play

Finance Minister, Seth Terkper

The International Monetary Fund- IMF is charging Ghana to be more cautious with borrowing through the Eurobonds issue in order not to worsen its debt situation.

The country’s public debt now exceeds pre-HIPC levels, according to the International Monetary Fund (IMF) report after a review of Ghana’s performance under the bailout deal.

The IMF is projecting that Ghana’s debt levels – which has hit about 90 billion Ghana cedis as at June this year – could increase further in the coming months.

Read more: Govt debt woes deepen as it exceeds debt target for second quarter

Per analysis done by the Ghana News Agency,  Ghana's debt at the time of joining the Highly Indebted Poor Country (HIPC) initiative in April 2001 was 6,025.6 million dollars (about 24 million Ghana cedis currently). Debt-to-GDP ratio then was about 110 percent.

The IMF has emphasized in its report on that Ghana’s debt could cross the dreaded 70 percent of GDP mark by the end of this year. The IMF projects a 75 percent debt-to-GDP ratio for the country by end of 2015.

Read more: IMF to establish council to police Ghana's expenditure

Many economists believe a debt-to-GDP ratio exceeding 70 percent spells doom for an economy.

The IMF says Ghana’s economic growth prospects will depend on how fast the ongoing power crisis will be addressed.

"Economic growth prospects will depend on how fast the ongoing electricity crisis  is addressed. A new decline in commodity prices would weigh on the fiscal and external balances", the IMF said.

According to the Washington-based lender, fall in the prices of gold, cocoa and crude oil on the world market could put the country’s fiscal gains made over the last few months into jeopardy.

The situation, according to IMF, could reduce Ghana reserves and weaken the cedi against major trading currencies even further.

On the central bank, the IMF said the Bank of Ghana should be ready to tighten policy more aggressively if inflationary pressures do not recede.

Read more: We are exchanging debt, not adding- Seth Tekper

 

It gave a thumbs up to recent decision by the Bank of Ghana to introduce new liquidity management instruments to improve monetary policy transmission and support more effective implementation of the inflation targeting framework.

The IMF says authorities must pursue reforms aimed at deepening the foreign exchange market, which, combined with smoothing interventions of BoG backed by increased external reserves, should help reduce volatility of the exchange rate over time.

Meanwhile, government has always maintained it is working hard to contain the rising public debts. 

Do you ever witness news or have a story that should be featured on Pulse Ghana?
Submit your stories, pictures and videos to us now via WhatsApp: +233507713497, Social Media @pulseghana: #PulseEyewitness & DM or Email: eyewitness@pulse.com.gh.

Recommended Articles

Recommended Videos




Top Articles

1 Illegal Operations Menzgold extends suspension of gold vault market servicesbullet
2 Investment banks in Ghana Top 5 investment banks in Ghana and why you...bullet
3 Illegal Operations Menzgold customer threatens to sue over principal...bullet
4 Ponzi schemes in Ghana These investments are Ponzi schemes in...bullet
5 Kotoka International Airport GACL to move all domestic airlines...bullet
6 Forensic Audit 6 state institutions misappropriate GH¢800 millionbullet
7 Ghana-Chinese Relations 6 reasons why the StarTimes deal is...bullet
8 How to create a verified PayPal account Learn how to...bullet
9 Retrenchment ATL sacks 200 workers, rest of staff not...bullet
10 Economy of Ghana Vice President Bawumia says Ghana's...bullet

Top Videos

1 Money Alert Meet Africa's richest womanbullet
2 Forbes 2018 Africa's billionaires rich listbullet
3 Former Capital Bank staff grills pork for survivalbullet
4 Support Finance minister buys Kantanka carbullet
5 Dr Joseph Siaw Agyepong Nobody can collapse my company – JOSPONGbullet
6 New Discovery Ghana discovers new mineral, lithium in...bullet
7 Tech 6 reasons you should buy an iPhone SE instead of any of...bullet
8 Selorm Adadevoh MTN CEO dances Agbadzabullet
9 Plane Crash Starbow suspends operations following plane...bullet
10 New Phones Nokia MWC 2018 Event in 5 minutesbullet

Business

X
Advertisement