Twelve developing countries, including Ghana, have been identified as having an impending debt crisis due to the global economic downturn.
Ukraine, Nigeria, Kenya, Tunisia, Belarus, El Salvador, Egypt, Ethiopia, Argentina, and Ecuador were among the other 12 nations on the list that were at risk of defaulting on their debt.
A study from Reuters claims that among other things, enormous borrowing, growing inflation, a falling currency, and a skyrocketing debt to Gross Domestic Product, GDP, ratio are the causes of Ghana’s specific predicament.
“Frenzied borrowing has caused Ghana’s debt to GDP ratio to rise to almost 85%.
“Its currency, the cedi, has lost nearly a quarter of its value this year, and it was already spending over half of the tax revenues on debt interest payments. Inflation is also getting close to 30%, “the report noted.”
According to the research, Belarus was “on the brink and at least another dozen are in the danger zone as growing borrowing prices, inflation, and debt all fuel fears of economic collapse,” and countries like Lebanon, Sri Lanka, Russia, Suriname, and Zambia were already in default.
It reported that nations seeking to prevent an economic collapse were turning to the International Monetary Fund, among other sources, for rescue plans.
Ghana is currently in talks with the IMF for one such programme after the government.
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