Sammy Gyamfi, the National Communications Officer of the opposition National Democratic Congress (NDC), has partly attributed the persistent depreciation of Ghana’s currency, the cedi, to a shortage of US dollars in the local market. The cedi, which has faced varying levels of depreciation under the current administration, recently traded at GH¢17.00 to a dollar.
Gyamfi pointed to the country’s financial struggles, particularly the government’s heavy borrowing, as a major reason for the dollar shortage. “The root cause of this issue is our financial instability. Since coming into power in 2017, the NPP government, led by its Economic Management Team under Dr. Bawumia, has recklessly engaged in excessive borrowing,” he asserted.
He criticized the government for disregarding advice to exercise caution in its borrowing decisions. “Despite warnings from the NDC and independent voices, they went ahead with imprudent borrowing,” he added.
Gyamfi argued that the loans were not channeled into productive investments capable of generating revenue to service the debt. “The borrowed funds were squandered on non-productive areas instead of revenue-generating projects and programs. This has brought us to a point where, in November 2022, Ghana could no longer meet its debt obligations, marking the first time in our history that we declared bankruptcy,” he lamented.
He also highlighted the consequences of this financial mismanagement, including Ghana’s exclusion from international capital markets. He attributed this to what he called “poor leadership, reckless borrowing, and the misuse of funds on consumption and corruption.”
On the impact on investments, Gyamfi noted that investor confidence in the Ghanaian economy has been severely eroded. He stressed that restoring stability would require prudent fiscal and monetary policies, which he claimed the NDC, under the leadership of John Mahama, is committed to implementing.
According to the Ministry of Finance, Ghana’s total central government debt reached GH¢742.0 billion as of June 2024, equivalent to 70.6% of the country’s GDP. This figure reflects a 22% increase from the end of 2023, driven by cedi depreciation and creditor payments. The debt comprises GH¢452.0 billion in external debt and GH¢290.0 billion in domestic debt.
Source: TheDotNews