‘A debt crisis looms on the horizon in Ghana’ – Prof. Steve Hanke warns

A professor of Applied Economics at the Johns Hopkins University-USA, Steve Hanke, has reiterated that Ghana’s current economic situation will result in a debt crisis.

Hanke, who has taken a keen interest to shed light on global economic woes, said Ghana faces a looming debt crisis which has since forced the country to engage the IMF for an economic support programme for a possible 17th time.

Government on December 5 announced plans to undertake a Domestic Debt Exchange programme which will allow bondholders to voluntarily exchange their bonds with fresh bonds.

The move meant that Ghana is inviting eligible holders to exchange GH¢137.3 billion of the domestic notes and bonds, including Energy Sector Levy Act Plc and Daakye Trust Plc, for a package of New Bonds to be issued.

Following the announcement, Prof. Hanke on his Twitter expressed further concern about Ghana’s local currency which he noted has depreciated by 56 percent since 2020.

He further described Ghana's local currency as ‘junk’ - meaning the cedi's value is unreliable on both the international and domestic markets.

“A debt crisis looms on the horizon in #Ghana. Since January 1st, 2020, the #cedi has depreciated ∼56%. Thanks to Ghana, my rogue’s gallery of JUNK CURRENCIES just keeps growing,” he wrote on December 4, 2022.

A debt crisis looms on the horizon in #Ghana. Since January 1st, 2020, the #cedi has depreciated ∼56%. Thanks to Ghana, my rogue’s gallery of JUNK CURRENCIES just keeps growing.https://t.co/qcUzz9iaxw

— Steve Hanke (@steve_hanke) December 4, 2022

It would not be the first time Professor Steve Hanke has given a damning verdict on Ghana’s economic indicators and debt situation.

The 79-year-old economist has on numerous occasions called out Ghana’s economic managers over their handling of the economy.

He has also described Ghana's inflation status as terrible.

MA/FNOQ