Ghana’s debt stock now constitutes 70% of the country’s GDP after increasing from GHS 142 billion in 2017, to GHS 170 billion in 2018.
This was disclosed by Finance Minister Ken Ofori-Atta during Thursday’s presentation of the 2019 budget statement and economic policy document.
The Finance Minister told Parliament that the increase in the country’s public debt is driven primarily by the cost of the clean-up of the financial sector.
He explained that government is fully committed to ensuring that that financial sector is cleaned up.
“Mr. Speaker, the nominal public debt stock as at end September 2018 was GH¢170.8 billion, comprising external and domestic debt of GH¢86.6 billion and GH¢84.1 billion, respectively. The overall rate of debt accumulation in 2018 is 19.8 percent, driven primarily by the cost of the clean-up of the financial sector, involving resolution of the seven (7) defunct banks. The rate of debt accumulation would have been 11.5 percent without the clean-up exercise,” Mr. Ofori-Atta said
“Mr. Speaker, public debt (including financial sector bailout) as a percentage of GDP stood at 70.7 percent at the end of September 2018 compared with 69.2 percent during the same period in 2017.
“The public debt stock (excluding the financial sector clean-up cost) as a ratio of GDP is 66.5 percent. In terms of the rebased GDP, the public debt to GDP ratio is 57.2 percent (including financial sector clean-up cost) and 53.9 percent (excluding clean-up cost),” he added.
This comes despites numerous cautions by the International Monetary Fund (IMF) against reaching the 70 percent of GDP point.
READ ALSO: Patching of Tema Motorway begins
Meanwhile, the IMF’s data also shows that Ghana’s debt to GDP ratio now stands at 71.2%, contrary to the 70.7% quoted by the Minister.
To this end, every citizen of Ghana’s 29 million population effectively owes nearly GHS 5,600.
Nuru Deen Story - The Miraculous Xylophone Manufacturer: Faces of Ghana | Yen.com.gh
Your stories and photos are always welcome. Get interactive via our Facebook page.