Senior Minister-designate, Yaw Osafo-Maafo, says Ghana’s debt to GDP ratio has moved above the normal limits and it is scary.
Mr. Osafo-Maafo who appeared before the Appointment Committee of Parliament today said, Ghana’s debt to GDP ratio which should normally be around 45-50% has crossed the border of 70% which is very critical in any economic sense.
“According to the last figures from the Bank of Ghana last week, Ghana’s ratio is now 71.8% which is very critical,†he stated.
“Because we should not exceed any debt restructuring, the country has a very big problem which is very scary,†he added.
He stressed that, the situation is very critical that the country cannot even afford to start looking at health and education.
“I get scared when I look at the figures and so we have to be prudent and strict to address the issue,†he advised.
The country, he said, also needs an inflow, improve upon revenue as much as possible, watch expenditure and ensure there is value for money in everything aspect of the economy.
The Minister of Finance between 2001 and 2004 was actively involved in the debt restructuring of the country.
According to him, the strategies used in the past cannot be applied to the current situation as it is beyond the former situation.
“The country is in a completely different situation. In 2001, Ghana per capita was 412 dollars but today it is 1400 and above and now a lower middle-income country,†he stated.
“The idea of going HIPC to get debt rating off is no more applicable because we are not a poor country but rather a middle-income country,†he stressed.
He added that it is even more difficult now to look at the aspect because by just pronouncing HIPC, the country had 4,000 million dollars written off which gives a lot of fiscal space and made things easy “but the situation is different now,†he added.
Â