FLASHBACK: Ghanaians repaying public debt through the nose – Banking Consultant

Banking Consultant, Dr. Richmond Atuahene, in October last year said Ghanaians were repaying loans of government through the nose.

He explained that Ghanaians paying unreasonably high prices to finance government's debt because it borrowed to spend instead of investing into projects.

Read the full story originally published on October 11, 2023 by www.ghanaweb.com.

Banking Consultant, Dr. Richmond Atuahene, has said Ghanaians were repaying loans of government through the nose.

He enunciated that Ghanaians paying unreasonably high prices to finance government's debt because it borrowed to spend instead of investing into projects.

In his view, the government needs to keep its borrowing in check in order to ensure that it does not exceed its limit.

Speaking at the Ghana Economic Forum held in Accra on Tuesday, October 11, 2023, the banking consultant called for a review of the 1992 Constitution to place a cap on the government’s borrowing.

Mr Atuahene said, “Ghana as a country, must from today, begin to look at the constitution. Inside the constitution, according to literature from IMF, the United Nations in 2014, the debt to GDP of any developing country should not exceed 50 percent and developed countries are given a leeway of 60 percent."

“We find ourselves in this position because we have a constitution that has no business of setting a debt cap like the Americans have it. When the Americans had the cap and they had trouble they had to go to Congress and when they go to Congress you will see how they suffer. So we need to come to the constitution and amend it as soon as possible," he stated.

Mr Atuahene added that, “This is one of the shortest strategies that I will recommend so that we don’t find ourselves in such a situation ever again, borrowing and borrowing for consumption. As I have always said, you will pay through the nose, and Ghanaians repaying through the nose.”

Ghana’s public debt as of June this year stood at GH¢575.5 billion. This represent 71.9% of Gross Domestic Debt (GDP).

This was a marginal rise of GH¢6.3 billion compared to the GH¢569.2 billion recorded in April 2023.

According to the Bank of Ghana’s Summary of Economic and Financial Data for September 2023, the country’s public debt has increased by GH¢27.7 billion since January 2023.

In dollar terms, the total debt stock stood at US$52.3 billion as of June 2023.

External debt accounted for GH¢328.6 billion (US$29.9 billion), while domestic debt accounted for GH¢246.9 billion ($30.8 billion).

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