New Patriotic Party’s (NPP) Vice Presidential candidate Dr Mahamudu Bawumia has said investors are fast losing confidence in Ghana’s economy.
[contextly_sidebar id=”YBpuUeIziIgZBRR3KobJGxfYhibcXCgP”]This he said is because of government’s inability to pay its foreign debts, adding that it is adversely affecting the country.
Speaking at a fund raising program in London, Dr Mahamudu Bawumia said this spells doom for the country’s economic growth as the public debt increases to close to 70% of the nation’s GDP.
“Ghana appears to be having problems servicing her debts and this is making investors lose even more confidence in the economy. There is word out in the financial market circle that Ghana has recently defaulted on its debt to the Standard Bank for the financing of a [military project].”
According to the Bank of Ghana, the country’s current total public sector debt stock stands at 88.2 billion cedis as at the end of March 2015, representing 65.3 percent of GDP.
Ghana’s debt hit 76.1 billion cedis by the close of last year, up from the 51.9 billion cedis it recorded in 2013.
The Minister of Finance, Seth Terkper has said government will use proceeds from the stabilization fund to help defray Ghana’s debts.
He said the stabilization fund will be used to set up a ‘sinking fund’ which would be used to pay up some of the debts.
In the midst of all this, the cedi has plunged into another free round of free fall, triggering high cost of living and inflation.
The currency has so far depreciated by more than 20% to the major trading currencies this year alone.
The Bank of Ghana has sought to assure Ghanaians and investors that it has begun some of level of interventions to stabilise the situation but some financial analysts are skeptical.
By: Godwin A. Allotey/citifmonline.com/Ghana