- The ballooning of the public debt stock has been attributed to the effects of the coronavirus pandemic
- The debt stock stands at Ghs291.6billion as of the end of December 2020
- That notwithstanding, the country is said to be recovering pretty well from the pandemic
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Former Finance Minister, Seth Terkper, has warned that Ghana’s economy is fast drifting towards a Highly Indebted Poor Country (HIPC).
Ghana’s total public debt increased from Ghs122billion to Ghs291.6billion as of the end of December 2020.
The ballooning public debt stock was attributed to the current coronavirus pandemic, the banking sector cleanup exercise among others.
The fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion, that of the financial sector clean-up was Ghs21billion with the cost of excess capacity charges to IPPs standing at Ghs12billion, according to the 2021 budget statement presented to Parliament on Friday, March 12, 2021.
But for these factors, the country’s public debt would have been hovering around Ghs238.9billion representing 58.7% of GDP, the Akufo-Addo administration said.
Commenting on the figures, the former Finance Minister painted a disturbingly grim picture of the Ghanaian economy under the stewardship of President Akufo-Addo.
He said the administration’s economic management team needs to fasten its hold over the rising debt to avoid an unexpected economic crush.
“Our debt had crossed 70% on the old basis and we became alarmed so President Mahama gave approval for the establishment of a sinking fund."
"Debt is debt and there’s nothing like free lunch. When you defer debt instead of paying it through the sinking fund, the debt is still debt,” Terkper told Accra-based Starr FM and monitored by YEN.com.gh.
“We shouldn’t be happy about deferral of debts because the nation could go back to HIPC. We came close to 70% and we were at risk of debt distress but now we’re debt distressed,” he added.
Meanwhile, Finance Minister-designate, Ken Ofori-Atta, had been approved by the Appointments Committee of Parliament.
Ofori-Atta was approved by consensus after two days of vetting.
Starr News reports that Ofori-Atta secured the votes of both minority and majority members of the committee.
He was affirmed by Parliament by voice vote on March 29, 2021.
Still, in Parliament, Osei Kyei Mensah Bonsu has recanted his earlier statement that Nana Asante Bediatuo unilaterally wrote the letter slashing the budget estimates for the legislature and the judiciary.
There was a Ghs77million and over Ghs119million slash in the estimates presented by the Judiciary and Judicial Service and the Legislator respectively.
The presidency said the decision to slash the estimates was necessitated by the country’s current economic challenges.
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