An Associate Professor of Finance at Andrews University, Michigan, in the United States, Prof. Williams Peprah, has disputed President Akufo-Addo’s claim regarding the state of the Ghana economy, stating that the country is “technically broke” based on its financial indicators.
Prof. Peprah argues that Ghana’s economic indicators suggest otherwise, maintaining that the country is, in fact, “technically broke.”
President Akufo-Addo in his final “State of the Nation Address” stated that his administration was leaving behind Gross International Reserves of US$8 billion, significantly higher than the $2.5 billion recorded when his government assumed office in 2017.
However, speaking on Joy News, Prof. Peprah asserted that the economic struggles of 2024 contradict the President’s claim.
“Let me say that the president’s statement is inaccurate. This report pertains to 2024, so the president must address the financial realities of 2024 based on the available data,” Prof. Peprah emphasized.
He explained that being “broke” is defined by a country’s inability to meet its financial obligations, both domestically and internationally, and the necessity to adopt austerity measures or seek international assistance. By this definition, he argued, Ghana economy faced significant financial challenges in 2024.
“I’ll start with the technical definition of a country being ‘broke.’ It simply means that a country cannot meet its domestic and external financial obligations, lose access to international credit markets, and faces severe economic challenges.
Additional indicators include austerity measures, debt restructuring, and the need to seek international assistance to restore stability. By this definition, Ghana faced these challenges in 2024,” Prof. Peprah explained.
The Associate Professor also pointed out that the government’s announcement in December 2023 to suspend debt payments effectively constituted a default.
He added that if the government begins loan repayments as planned, starting with a US$346 million coupon payment, the narrative could change.
“In 2024, we underwent debt restructuring and are scheduled to start repaying loans tomorrow. If we successfully make the US$346 million coupon payment tomorrow, as stated by the president, then Ghana can no longer be considered ‘broke.’ However, for the period covered by this statement, Ghana was broke,” he stated.
On the US$8 billion Gross International Reserves, Prof. Peprah posited that professionals in finance and economics assess Net International Reserves (NIR) instead, which currently stands at approximately $4.92 billion.
He also highlighted Ghana’s rising debt burden, noting that the debt-to-GDP ratio increased from 56.8% in 2016 to 74.6% in 2024, a reflection of the country’s worsening financial position.
