The Member of Parliament (MP) for Tano North and Deputy Ranking Member on Parliament’s Finance Committee, Dr Gideon Boako, has criticised the Minister for Finance over what he describes as contradictory explanations regarding Ghana’s rising public debt and the role of exchange rate movements.
In a statement titled “Double-tongued Minister for Finance,” Dr Boako questioned why the government credits currency appreciation when debt levels fall, yet also blames the same appreciation when debt levels rise.
“They were bragging that the stronger Cedi helped to reduce the debt stock, so why this contradiction?” he asked, suggesting inconsistency in the government’s economic narrative.
Dr Boako said he struggles to understand claims that currency appreciation directly increases debt levels.
While he acknowledged that exchange rate movements could have indirect effects through capital flows, he argued that such explanations do not sufficiently justify the sharp increase in Ghana’s debt stock.
“How does currency appreciation cause debt to go up? Indirectly, yes, I can understand, but not directly,” he stated.
He further noted that the government inherited a foreign currency-denominated debt stock assessed at an exchange rate of GH¢14.3 to the dollar at the end of 2024, while the current exchange rate stands at approximately GH¢11.4 to the dollar.
Despite this appreciation, he said the debt stock has increased significantly, a development the Finance Ministry continues to attribute to exchange rate pressures.
According to Dr Boako, the recent depreciation of the cedi over the last three months, from about GH¢10.4 to GH¢11.4 on average, cannot account for an increase in debt of over GH¢71 billion.
“This clearly shows a complete lack of understanding of the debt dynamics,” he asserted, adding that “the Minister for Finance should please come again” to properly explain the figures to the Ghanaian public.
