Question

to what extent would you agree to the statement that Ghana's debt stock has reached distressing levels despite the fact that the country benefited immensely from the international debt relief initiatives?

Answer 1

Ghana is suffering from the problem of the debt crisis. The debt level is rising despite having availed the concessions from the IMF and other international institutions.

The debt relief initiatives are not going to change the fundamentals of the Ghana economy. The Ghana economy is dependent on the commodities for export. The cocoa, gold, and oil account for over 80 % of export earnings. Thus, now the oil price are falling down, so the export earning of the country as well. the Ghana government pays 30 % of total expenditure towards debt servicing. Now the condition of debt trap is quite clear and glaring.

Hence, despite the debt relief initiatives, the problem of debt is acute and government must diversify export to stabilize the export earning. further, the other initiatives must be taken by the government to reduce the debt stock.