Independence Arch in Accra, capital of Ghana (Photo: Joe Ronzio/Flickr)
Ghana is in a debt crisis. Having had significant amounts of debt cancelled a decade ago, the country is losing around 30% of government revenue in external debt payments each year.
Ghana’s crisis is the result of a gradual increase in lending and borrowing off the back of the discovery of oil and high commodity prices. More money was then borrowed following the fall in the price of oil and other commodities since 2013, to try to deal with the impact of the commodity price crash, whilst the relative size of the debt also grew because of the fall in the value of the Ghanaian currency, the cedi (GH¢), against the dollar ($).
At the moment, all the costs of the crisis are being born by the people of Ghana, and none by the lenders. This is unfair. Lenders should carry their share of the cost of any irresponsible lending, and of the change in circumstance caused by the fall in commodity prices.
Additional action is also needed in order to prevent a repeat of Ghana’s crisis, including changes on the part of the government and lenders to ensure that loans are well used, and that more of the revenue generated by the economy is turned into government revenue by taxation.
Read the 4 page executive summary
Read the 32 page report