Ghana risks being classified as a country with a high risk of debt distress by International rating agencies, according to Dr. Mahamudu Bawumia, running-mate for the New Patriotic Party\u2019s (NPP) presidential candidate, Nana Akufo Addo.<\/p>\n
According to the former Deputy Governor of the Bank of Ghana, government in the past six years has increased the nation\u2019s debt stock by an average of 98% per year<\/strong><\/span><\/a>.<\/p>\n Addressing members of the NPP UK branch and the Young Executive Forum in the UK, Dr Bawumia described government’s rate of borrowing as “reckless” and said the situation is “worrying.”<\/p>\n [contextly_sidebar id=”uEljBsHAhkN0h1XVtEgsBLNy6cIkF9GZ”]\u201cOn this track Ghana is clearly on the way back to the unsustainable debt level that pushed us to HIPC. This is a worrying development because Ghana received HIPC relieve just ten years ago after a similar debt binge by the previous NDC government. If the current borrowing binge continuous it will only be a matter of time before the international rating agency will classify Ghana as a country with a high risk of debt distress,\u201d he warned.<\/p>\n Dr Bawumia explained that, \u201cthe consequences of this classification will compromise Ghana\u2019s ability to raise further financing from the international capital market.\u201d<\/p>\n The country has been hit with huge budget deficit, high inflation rates, a huge wage bill, rising cost of living and huge public debt.<\/p>\n These and other reasons have conspired to take huge toll on Ghana’s economy, compelling government to begin talks with the International Monetary Fund (IMF) for a bailout programme.<\/p>\n According to Dr.\u00a0 Bawumiah, \u201cthe accumulation of debt by this NDC government over the last six years has quite frankly been reckless. The interest payment on this debt in 2014 alone is four times Ghana\u2019s oil revenue just the interest rate. In 2015 the interest payment alone will amount to Ghc 9.5billion.\u201d<\/p>\n Meanwhile, a programme between government and the International Monetary Fund (IMF)<\/strong><\/a><\/span> meant to elevate Ghana from its economic woes is expected to begin in 2015.<\/p>\n Government through the 2015 budget it presented to Parliament recently has listed some measures to stabilize the economy.<\/p>\n