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A report on Myjoyonline says, The current state of Ghana's public
debt, according to the latest figures from the Bank of Ghana means
that every Ghanaian including new born babies, automatically owe
GH¢2,700.
The total public sector debt stock as at the end of August 2014 was
GH¢65.7 billion (57.3% of GDP), up from 55.5 percent of GDP (GH¢51.9
billion) as at the end of December 2013.
Ghana with an estimated population of 25 million people, when divided
by the aforemntioned public debt (GH¢ 65.7 bn), means that every
Ghanaian owe GH¢2,700 to the country's creditors both internally and
externally as of August this year.
In 2009, every Ghanaian was indebted to the tune of GH¢380 as the
total public debt stock at that time stood at GH¢9.5 billion.
This means that from 2009 till date, an additional amount of GH¢2,320
had been added to the total debt stock owed by every Ghanaian.
Ghana's public debt continues to rise as it hit GH¢19.027 billion at
the end of March 2011 compared to GH¢17.2 billion recorded in December
2010.
Some economists, including the renowned Dr. Joe Abbey has described
the trend as alarming, saying it could harm the nation in the
long-term as the nation may not have the capacity to service or pay
the debt.
Over the last four years, analysts in the financial services industry
such as Standard ans Poors and policy think tanks such as the Danquah
Institute, have been vocal in raising concerns about what it considers
to be a "mad rush for loans" by government, and the disturbing absence
of real transparency and value-for-money component in several of these
loans.
"Today, it has become evidently clear that Ghana is fast-forwarding
backwards to its 2000 status of a poorly-indebted, and with very
little to show for this high level of unprecedented borrowing and
spending," the Institute has stated in a statement recently.
The Institute continued: "What government is effectively doing is
building a future of debts for the youth of Ghana to inherit and
struggle with."
In March this year, Fitch Ratings, an international rating agency, has
revised the outlook on Ghana's long-term foreign and local currency
Issuer Default Ratings (IDR) from stable to negative, casting doubts
over the country's ability to service its debts in the future in time.
In June this year, another international rating agency, Moody's
Investors Service, also downgraded Ghana's sovereign rating to B2 from
B1, citing the country's rising debt burden and deteriorating debt
affordability.
In its report, Moody's stated that the primary driver of its decision
to downgrade Ghana's sovereign rating to B2 was the country's high and
rising debt burden and deteriorating debt affordability.
The report indicated that the rating agency expected public debt to
exceed 65 per cent of Gross Domestic Product (GDP) by the end of 2015
from 55.7 per cent in 2013, mirrored by rising interest expenses
relative to government revenues.
