Akufo-Addo’s Debt Appetite Drives Ghana Into Worst HIPIC – Ato Forson

The Member of Parliament for Ajumako-Enyan-Esiam constituency and a former Deputy Minister of Finance, Dr. Cassiel Ato Forson, has warned that the insatiable appetite of the Akufo Addo administration for loans will drive Ghana to rejoin the heavily indebted poor countries (HIPC).

According to him, the country’s debt stock has hit a worrying state and must be bridled to avoid a total collapse of the economy.

Dr. Ato Forson made a detailed presentation at the National Democratic Congress (NDC) Ranking Members Forum on policy dialogue on Ghana’s economy on Monday, July 26, 2021.

Dr. Ato Forson’s presentation looked at Ghana’s debt profile and debt sustainability from the year 2000 – 2020, saying, “There is no dispute that the Ghanaian economy is in its worst shape in recent memory.”

In his analysis, he showed how the Akufo Addo administration is the worst since Ghana’s independence in racking up public debt.

In less than five years, the government has ballooned Ghana’s debt to over GHC 330 billion with a debt to GDP ratio of about 80%. The figure is expected to get worse by the close of 2020 when debt to GDP is projected to strike 85%.

Of the GHC 330 billion of Ghana’s public debt, the Akufo Addo administration had caused more than a GHC 190 billion debt pile up.

Last week, the Summary of Economic and Financial Data by the Bank of Ghana captured the dire straits Ghana has been plunged into.

The data revealed that Ghana’s public debt stock has hit more than GHC 332 billion. 

The government’s debt guzzling behaviour was on full display when in less than two months, between April 2021 and May 2021, the Akufo Addo administration piled up a public debt stock of more than GHC27.8 billion.

In March 2021, the total debt stock stood at ¢304.6 billion, and the significant increase in the debt stock is due to the $3 billion Eurobond raised in March 2021 as well as the huge borrowing on the domestic market.

These terrifying levels of debt have practically put the country deep into the debt unsustainability levels that drove the country to opt for the infamous IMF programme of Highly Indebted Poor Country (HIPC) in early 2000 by the John Kufuor administration, Ato Forson noted.

Meanwhile, critics have noted worryingly that a bulk of the debt is self-inflicted to serve the private interest of Finance Minister, Ken Ofori-Atta who is incidentally a nephew to President Akufo Addo.

Ken Ofori-Atta who has been criticised strongly for his eagerness to seek loans or float Eurobonds for Ghana, has planted his private company, Databank Financial Services as the main transaction broker for Ghana’s Eurobond.

The other company given the juicy deal as transaction advisor to the government of Ghana is that of Charles Adu-Boahene, a Minister of State at the Finance Ministry. Adu Boahene is practically a protégé of Ken Ofori-Atta.