According to World Bank Country Director Pierre Laporte, the current economic challenges may have begun before the Covid-19.
In its January 2022 Monetary Policy Report, the Bank of Ghana stated that the stock of public debt was equivalent to 78.4 percent of GDP at the end of 2021, up from 76.1 percent of GDP at the end of 2020.
As of November 2021, the country’s total public debt stock stood at approximately 344.5 billion, a situation that experts have described as alarming.
The Finance Ministry has stated that if nothing is done to increase revenue generation methods, such as the passage of the E-levy, tasks such as remuneration of public sector workers may become a problem.
The Minority has also accused the government of mismanaging and misapplying funds, causing the economy to stifle and the fiscal space to shrink.
The government has blamed the Covid-19 on numerous occasions for the economy’s unsustainable debt levels.
The Minority has claimed that the government is using the pandemic to justify inefficiencies, which the government denies.
However, World Bank President Jim Yong Kim insists that warning signs of an impending economic downturn were evident even before the global pandemic struck.
“Yes, Covid hasn’t helped, but there were signs that the situation was getting a little more difficult even before Covid,” Mr Laporte explained.
“He [Finance Minister] acknowledges the gravity of the situation,” he says.
The situation is extremely difficult.
“Restoring macro-sustainability in Ghana will be a difficult task,” he said on Tuesday.
As a result, he urged the government to be more forthcoming about its dealings with the country’s fiscal situation.
He was speaking at a One Ghana Movement-organized public lecture.
The World Bank also predicted that Ghana’s economy would suffer in the future.
This comes as the exchange rate continues to rise in the face of rising inflation and the rising cost of living, as well as an increase in the price of petroleum products.
