Former Deputy Finance Minister and Member of Parliament for Obuasi West in the Ashanti Region, Kwaku Kwarteng, has raised concerns about the management of Ghana’s economy, likening it to a Ponzi scheme. In a statement titled “To break-the-eight, we must first break the norm,” Kwarteng highlighted the impact of decades of poor governance and economic inefficiency on the current economic challenges faced by the country.
Kwarteng pointed out that Ghana has consistently spent beyond its means since gaining independence, relying on borrowing to cover the excess. He described the country’s economic strategy as similar to a Ponzi scheme, where higher interest rates are offered to lenders to repay previous debts, resulting in a cycle of borrowing and overspending.
The former chairman of the Finance Committee in Parliament emphasized the need for a shift in behavior within the political class to prevent a collapse of democracy in Ghana. He highlighted the trend of election campaigns focusing on past achievements and promises rather than the future well-being of the country.
In a related development, the Finance Minister, Dr. Mohammed Amin Adam, disclosed that Ghana’s public debt had risen to GH¢742 billion (US$50.9 billion) as of June 2024. This amount represents 70.6% of the country’s Gross Domestic Product (GDP), with external debt accounting for 60.9% and domestic debt for 39.1%.
Dr. Adam attributed the increase in debt to the depreciation of the cedi and continuous disbursements from creditors. He emphasized the need for sustainable debt management to avoid overburdening the economy with repayments.
As Ghana grapples with mounting debt and economic challenges, stakeholders, including political leaders and policymakers, are called upon to adopt responsible financial practices and prioritize long-term economic stability. Failure to address these issues could lead to dire consequences for the country’s future.
