Former Deputy Minister of Finance and Member of Parliament for Obuasi West Constituency in the Ashanti Region, Kwaku Kwateng, has likened the management of Ghana’s economy to a Ponzi scheme.
He said current economic problems at both the national and household levels stem from decades of poor governance marked by political mismanagement and economic inefficiency by various administrations.
In a statement released on Thursday, July 25, titled “To Break the Eight Principles, You Must First Break Common Sense,” Kwateng made comments that appeared to be direct advice to his ruling New Patriotic Party (NPP) and indeed all political parties.
The former chairman of Parliament’s Finance Committee noted that since independence, Ghana has consistently spent beyond its fiscal capacity and has resorted to borrowing to cover the excess.
He stressed that many of these expenditures have not been properly prioritised.
“We have always offered higher interest rates to lenders, borrowed more, used some of it to pay off previous debts and the rest to pay for the current year’s excess spending. In other words, we have been running our economy like a Ponzi scheme. The economy is suffering now because lenders are refusing to lend to us. Just like a Ponzi scheme goes into crisis when people stop depositing money.”
The Obuasi West Senator said many Ghanaians, including himself, fear that if Ghana continues on its current path, democracy, along with all political parties, will collapse.
He stressed that time is running out for Ghana and politicians must acknowledge this reality and change their behaviour to save the country from this impending danger.
“Since independence, it has been a political convention that any party contesting elections must praise its past achievements and make grand promises for the future. At the same time, it must portray its rival in the worst possible light. We have mastered this technique, and in the process, forgotten that politics should be about the future of our children and our country. We have reduced election campaigns to a pitched battle between competitors seeking power for the wrong reasons.”
Ghana’s public debt rises to 742 billion cedis
During the recent mid-term budget review presentation to Parliament, the Minister of Finance, Dr. Mohammed Amin Adamu, revealed that Ghana’s debt stood at 742 billion Ghana cedis (US$50.9 billion) as at the end of June 2024.
This represents 70.6 percent of the country’s gross domestic product (GDP). “This represents an increase of 22.0 percent due to the impact of the depreciation of the cedi and continued payments from creditors,” he said.
He explained that of the total debt, 452 billion cedis are external debt constituting 60.9 percent, while 290 billion cedis are domestic debt constituting 39.1 percent.
“External and domestic debt account for 43.0 percent and 27.6 percent of GDP respectively,” he said.
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