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Despite the cedi beginning to gain some strength against convertible currencies, Dr. H. Kwame Afaglo, an economist has said he is getting a bit more worried for the country as it is worse geared nominally than in percentile terms of Debt-to-GDP ratio.
Mathematically, the Debt-to-GDP ratio is acceptable especially when combined with the B credit rating, however, the real effect of the debt can be worse over time; as prices of goods and services are on the rise, ex-pump price of petroleum products also on the rise, commercial banks lending rate unattractive for business operations, portion of crude oil revenue projections not very certain for hedging, and organised labour have started screaming of the country being over borrowed without enough infrastructural developments to show for.
“The B credit rated Ghana’s economy is in bad economic health and if care is not taken the highly geared status will cause austerity measures to be effected in the very near future.
“Am not a pessimist but just trying to think through the ill economic health from an insider perspective and from the bottom-up”, Dr Afaglo added.
He explained that, “recent economies prefer job creation and its attendant effects than Debt-to-GDP ratios, so what is Ghana up to? Please I mean real jobs with incomes that takes employees home effectively and not NABCO and its likes.”
Source: NewsGuide Africa