‘Ghana has become a poster child for economic mismanagement’ – Prof. Steve Hanke

Steve Hanke, a professor of applied economics at Johns Hopkins University in the United States, has for some time now been monitoring Ghana’s economic growth and putting a spotlight on it.

In his latest #EconWatch diaries on his verified Twitter timeline, the academic stated that, since 2021, Ghana has lost more than half of its sovereign bonds especially as the country is seeking [for] an IMF economic rescue programme.

This, he said, has made the West African country which is on the brink of debt default “a poster child for economic mismanagement.”

“Ghana’s sovereign bonds have lost more than half their value since 2021. Ghana has become a poster child for economic mismanagement and is now on the brink of default,” Prof Steve Hanke’s tweet on August 2 read.

The 79-year-old Professor in his previous tweets about the country since its announcement of seeking an IMF programme blamed the government for imposing more hardships on Ghanaians by introducing more taxes in a move to salvage the economy. 

He has also described the Ghana Cedi as a ‘central bank junk currency’ – implying that its value is unreliable in both the international and domestic markets.

“After slamming Ghanaians with more taxes to “save the economy,” Pres. Akufo-Addo runs to the IMF. When he learn? SPOILER ALERT: Like GHA’s past 17 IMF bailout programs, a new program won’t work. Today, I measure Ghana’s inflation at 51%/yr,” Prof Hanke’s July 24 tweet read.

Background

It will be recalled that the government hitherto used to borrow from the Eurobond market, however, unfavourable economic conditions have compelled it to initiate contacts with IMF on the orders of President Akufo-Addo to Finance Minister Ken Ofori-Atta. 

Government hopes that through this approach, confidence from lenders will bounce back.

Consequently, the IMF arrived in Ghana from July 6-13 to begin initial discussions on the programme government intends to subscribe to.

The team has concluded its visit and has recommitted to helping the country to restore macroeconomic stability, safeguard debt sustainability, promote inclusive and sustainable growth, and address the impact of the war in Ukraine and the lingering aftershocks of the COVID-19 pandemic.