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 benefitted immensely from the international debt relief initiatives?

Answer 1

The country's dependency on both external loans and domestic borrowings simply led to a sharp rise in Ghana's debt reaching a fill be of 100% og GDP for the year 2000. Though the country was also given loans reliefs from the international debt relief initiatives but still the country's debt rate is sky rocketing.

The country is facing a rising goverment expenditure. Growing spending above the revenue receipts creates fiscal deficits that could harm the economiv growth of the country. The goverment spending was so high that it could 'nt be financed with taxation due to which the country more relied on borrowings from the other countries. Thats the only reason which has been identified to be responsible for the rapid increase in the stock of the ghana's domestic and external debts.

This continous rise in the domestic and the external debt despite of the relief from the international debt relief, simply forced the goverment of ghana to formulate and implement practical debt management policies to get their debt rates in control and to get better off from that distressing situation.

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