The World Bank Country Director, Pierre Laporte, says the economic challenges currently being experienced may have started even before the Covid-19 hit.
The Bank of Ghana, in its January 2022 Monetary Policy Report, said the stock of public debt was equivalent to 78.4% of GDP at the end of 2021, compared with 76.1% of GDP at the end of 2020.
The country’s total public debt stock stood at about ¢344.5 billion as of November 2021, a situation experts have described as alarming.
The Finance Ministry has said that tasks such as remuneration of public sector workers may become a problem if nothing is done to increase modes of revenue generation including the passage of E-levy.
The Minority has also accused the government of mismanaging and misapplying funds to cause the stifling of the economy leading to the shrinking fiscal space.
Government has, on numerous occasions, blamed the Covid-19 as a major contributor to the economy’s unsustainable debt levels.
The Minority has claimed that the government is hiding behind the pandemic to justify its inefficiencies, a position government rejects.
But the World Bank boss insists that the signs of the economic downturn were clear even before the global pandemic hit.
“Yes, Covid has not helped but even before Covid, there were signs that the situation was getting a little more challenging,” Mr Laporte explained.
According to him, “He [Finance Minister] acknowledges the severity of the situation.”
He was speaking at a public lecture organised by the One Ghana Movement.
The World Bank also projected harsher times for Ghana’s economy.
This comes as the exchange rate continues to rise amidst inflation and increasing cost of living coupled with a rise in prices of petroleum products.
“The situation is very difficult right now. Ghana faces a very tough road ahead to restore macro-sustainability,” he said on Tuesday.
He, therefore, called on government to be more open about the dealings regarding the country’s fiscal state.
Original story on MyJoyOnline