Covid-19 not the Root Cause of Ghana’s Economic Challenges – Economist

Mr. Johnson Addai Asante, an Economics Lecturer at Kumasi Technical University, has challenged the notion that Covid-19 is solely responsible for Ghana’s economic woes. According to his analysis, the crux of the issue lies in the country’s extensive borrowing practices rather than the pandemic.

“Our current challenges are not solely due to Covid-19, but rather stem from our excessive borrowing and mounting debt burden. Ghana’s external debt stands at 241 billion GHc, complemented by an internal debt of 194 billion GHc. These figures exclude the debts of state-owned enterprises.”

He expounded that the government’s suspension of debt servicing, which was facilitated by the International Monetary Fund, has temporarily stabilized the economy. However, he cautioned that once the government recommences debt repayment, the situation could deteriorate.

“The suspension of debt servicing means that the accumulation of foreign reserves for debt payment has been temporarily halted. While this has helped stabilize the exchange rate for now, the underlying instability persists. As the exchange rate rises, inflation is likely to follow suit, driving up overall prices,” explained Mr. Asante in an interview on Opemsuo Radio’s Nkwantannanso with George Adjei on August 15   .

Additionally, he lamented the escalating costs of locally produced foods, attributing the phenomenon to the escalating prices of agricultural inputs. This, he believes, compounds the economic challenges facing the country.

Story by Adwoa S. Danso