This how much Ghana’s debts is currently; Read more

September 26, 2022 Sky Carlos😎

Everyone in Ghana ought to be aware of the country’s current debt predicament.

One group of Ghanaians owes money to another group of Ghanaians who hold government debt, either now or in the future. If every holder of domestic debt is a citizen or permanent resident, there will be no net decrease in cash flow.

Furthermore, the government can always pay off its internal debt by printing new money, so insolvency is unlikely even if the debt is large.

However, this could lead to inflation. If the debt is held by foreign investors or is denominated in a foreign currency, this is not the case.

A country’s external debt is its promise to repay its overseas creditors in the original borrowed currency plus interest at future stated dates.

In other words, the debt is the obligation to pay off those obligations. To put it another way, the interest on overseas debt is not a domestic transfer.

When this occurs, real transfers out of national revenue are reflected in the current account of the balance of payments.

That’s why it’s more crucial than ever to put the money from borrowing abroad and paying down the interest on that debt.

Debt sustainability, as seen by lenders, means having enough money to pay off principal and interest on time each month.

Common measures of a country’s ability to pay off its debt include the ratio of its external debt to its gross domestic product and its exports.

The likelihood of bankruptcy is reduced, and the capacity to import goods is expanded, as exports rise.

At the close of the year 2000, it was estimated that Ghana owed a total of $7,738 million in interest-bearing debt.

There was a total of roughly $603.8 million in external debt.

In the year 2000, the present value of Ghana’s debt relative to its total export was almost 175%. The amount of money needed to pay off the country’s debt was equal to 22.3% of its total exports.

As of the end of the year 2000, it constituted roughly 99 percent of all government revenue excluding divestiture proceeds and grants.

What is Ghana’s external debt after 12 years?