Ghana is no longer the economic poster boy of West Africa

New Delhi: Ghana is no longer the economic poster boy of Western Africa. It was the world’s fastest-growing economy in 2019 after it doubled its economic growth. According to a report in Al Jazeera, Ghana is currently battling its worst financial crisis in decades with inflation hovering at a record 50.3 percent, the highest in 21 years. The country’s economic success was in the limelight when the new government of President Nana Akufo-Addo took power in January 2017 and brought down inflation significantly. Why is Ghana in crisis? The President of Ghana addressed the nation and said the country was undergoing an economic crisis. He blamed the coronavirus pandemic and the ongoing war between Russia and Ukraine. However, experts say that the crisis was inevitable and would have eventually exposed the ongoing crisis. Scrapping “nuisance taxes” According to a report in Al Jazeera, the New Patriotic Party scrapped what it called 15 “nuisance taxes”. These included the 17.5 percent value-added tax on financial services, real estate, and selected imported medicines. They also reduced import duties on spare car parts, abolished the 1 percent special import levy and the 17.5 percent VAT on domestic airline tickets. According to experts, it lead to a massive reduction in government revenue. The Pandemic The revenue took a major hit in 2020 when in 2020 coupled with a rise in government expenditures. The government provided free water and electricity to citizens and fed 470,000 households during a three-week lockdown that cost the nation $9.4m. According to reports, the most recent data released by the central bank put the country’s debt load at $48.9bn as of September. That represents 76 percent of GDP. Investors start moving out Investors started moving their money out of Ghana as they began to lose confidence in the economy as the government grappled with liquidity challenges. The government reached an agreement with the IMF for a $3bn loan in December. However, the West African country needs to carry out a comprehensive debt restructuring in order to receive the funds. According to experts, the solution to the current problem is for the government to reduce expenditure and increase revenue. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .