The Inconvenient Truth: Debt does not make a nation poor; wasting it does
The 2025 numbers challenge one of Africa’s most persistent economic misconceptions. Global public debt stood at almost 94% of GDP: Japan’s exceeded 200%, the United Kingdom’s was above 100%, Singapore carried exceptionally high gross debt while remaining a major creditor with vast public assets, and South Africa remained close to 78%. Yet debt distress is profoundly unequal.
Debt is not the sole contributor to a nation's poverty; mismanagement of borrowed funds can cause more harm. Recent global figures show that African countries generally have lower debt-to-GDP ratios compared to major economies like Japan and the United Kingdom. However, debt distress and its consequences vary significantly. It's not merely the amount borrowed but the terms, currency, and purpose of the loan that determine the impact on a country's financial health.
Ghana's experience during its 2022 debt crisis demonstrates that with the right governance and investment in productive assets, debt can be managed effectively. Countries like Singapore illustrate that even with high debt-to-GDP ratios, a nation can remain financially stable if it uses borrowed funds for development and maintains strong fiscal discipline.
The true measure of a nation's financial health lies not just in its debt level but in what it builds with the borrowed funds, the quality of its institutions, and its ability to repay.
Written by urgent.news from MyJoyOnline Ghana's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
