Minister of State in charge of Government Communications, Felix Kwakye Ofosu has outlined the country’s escalating debt servicing obligations, revealing the extent of the financial burden the government faces.
According to him, on 2nd January, Ghana made a debt servicing payment of $364 million, but this is only the beginning.
By the end of February, the country will need to pay a staggering $6.1 billion, and next year, the debt servicing figure is projected to rise to an eye-watering $180 billion.
“This is for a country whose budget is slightly above $200 billion,” Kwakye Ofosu explained, emphasizing that a substantial portion of national revenues will be used to service these debts, leaving limited room for any other expenditure.
The Minister-designate painted a grim picture, saying, “What it means is that all the taxes you and I pay, and everything else that we do in this country, that goes into our budgets, all of it will be used to pay debt servicing.”
The country’s debt default and deferral period have come to an end, and failing to meet these payments could result in catastrophic consequences for the economy.
“If we don’t do it, we will default again. If we default, it will be the end of our economy as we know it,” Kwakye Ofosu warned on TV3’s KeyPoints, January 25.
Highlighting the previous government’s role in the current crisis, he noted that the excessive borrowing without adequate plans to repay has put the country in a perilous position.
“The previous government was too happy to borrow, but didn’t have capacity to pay,” he said, referring to the lack of strategic financial planning that led to Ghana’s current situation.
As the government works to address these economic challenges, Kwakye Ofosu acknowledged the Herculean task that lies ahead. He noted that the finance minister’s role has become even more difficult, as nearly every revenue generated in the coming year will go towards debt servicing.
In response to the overwhelming burden, Kwakye Ofosu suggested the possibility of appointing deputy ministers to help navigate the crisis.
“Possibly two deputies there. In fact, it will be justified, to be honest with you,” he said, acknowledging the complexity of managing such enormous debt.
Despite these financial challenges, the Minister assured Ghanaians that the government is committed to addressing the nation’s problems and improving transparency.
“We will do what is necessary,” Kwakye Ofosu stated, stressing that the government remains accountable to the people of Ghana, who are essentially the ones who have “employed” the government.
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By Christabel Success Treve
The post State of the economy: All the taxes you and I pay will be used to for debt servicing – Kwakye Ofosu reveals first appeared on 3News.
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