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Fitch Solutions Dismisses Covid-19 and War as Sole Reasons for Ghana’s Economic Woes

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Fitch Solutions, a research and market information firm, has rejected the notion that Ghana’s economic challenges are solely due to the Covid-19 pandemic and the Russian/Ukraine war. According to Senior Country Risk Analyst, Mike Kruiniger, Ghana’s debt had already reached alarming levels before these external shocks set in.

Speaking at a recent Sub Saharan Africa Macroeconomic Update, Mr. Kruiniger attributed Ghana’s macroeconomic imbalances to both external and internal factors. He pointed out that Ghana’s debt servicing costs were already rising rapidly prior to the pandemic due to large-scale spending projects, such as the restructuring of the banking sector and providing free secondary education to all Ghanaians.

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Mr. Kruiniger also highlighted the high borrowing on the international capital market as one of Ghana’s problems. He stated that Ghana’s seamless desperation for cash led investors to flood the country, causing the currency to sell off and leading to the problems Ghana has been facing since early 2022.

In conclusion, while the Covid-19 pandemic and the Russian/Ukraine war have contributed to Ghana’s economic crisis, they are not the sole reasons behind the country’s economic challenges. Ghana’s debt had already reached alarming levels before these external shocks set in, and high borrowing on the international capital market has also been a significant problem. It is essential for Ghana to address these internal and external factors to restore confidence in the economy and attract more investments.

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