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Ghana’s public debt rises to GH¢332.4b in five months – Bank of Ghana

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Ghana’s public debt situation has been unsustainable for a long time. Data issued by the Bank of Ghana Monday July 26, 2021 shows that the country’s public debt has increased to GH¢332.4 billion, which is 76.6 per cent of GDP in five months at the end of May 2021 compared with GH¢291.6 billion, which is 76.1 per cent of GDP at the end of December 2020.

“Of the total debt stock, domestic debt was GH¢170.8 billion (39.4 per cent of GDP) while the external debt was GH¢161.5 billion (37.2 per cent of GDP),” the central bank said.

The Bank noted that at 76.6 per cent of GDP in May 2021, the level of public debt raises debt sustainability concerns and the Monetary Policy Committee reiterated the importance and urgency of fiscal consolidation efforts.

“Greater efficiency in debt management would be required, especially in the face of potential further tightening of global financing conditions which could heighten rollover risks and access to new financing in the outlook. This calls for strong vigilance and complementarity in fiscal and monetary policies to signal to the markets a strong commitment to consolidation,” the Governor, Ernest Addison said.

According to the Bank, provisional data on the budget execution for the first five months of 2021 indicated an overall broad cash budget deficit of 4.6 per cent of GDP, against the target of 4.4 per cent of GDP, adding that the primary balance also recorded a deficit of 1.6 per cent of GDP compared to the target deficit of 0.9 percent of GDP.

“Over the period, total revenue and grants amounted to GH¢22.6 billion (5.2 per cent of GDP), below the projected GH¢26.0 billion (6.0 per cent of GDP).

Total expenditures and arrears clearance amounted to GH¢42.7 billion (9.8 per cent of GDP), marginally below the programmed target of GH¢45.0 billion (10.4 per cent of GDP),” it said, indicating that these developments impacted the stock of public debt.

By Emmanuel K. Dogbevi
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