Ghana’s public debt rises up to 145% in 7 years

Ghana is the world’s second largest producer of cocoa, after Cote d’Ivoire. In 2010, the country became an oil producer, but between 2010 and 2017, the country’s public debt rose close to 145 per cent, from $9 billion to 22 billion, the Economic Report on Africa stated.

Ghana’s borrowing rose even higher, from 39.2 per cent of GDP in 2004–2008 to 71.8 per cent in 2017, the report said.

The country has been focusing on raising money through the issuance of Eurobonds. It recently raised $3 billion – the bonds were reportedly oversubscribed seven times.

The Bank of Ghana Monetary Policy Committee (MPC) in its recent report indicated that the stock of public debt was 57.98 per cent of GDP (GH¢173.2 billion) at the end of 2018 compared with 55.6 per cent of GDP (GH¢142.6 billion) at the end 2017.

“Of the total debt stock, GH¢9.6 billion (or 3.2 per cent of GDP) represented bonds issued to protect depositors’ funds. The external debt component was GH¢86.2 billion with a share of 49.7 per cent in the total debt,” the Governor of the Bank, Dr. Ernest Addison said in a press briefing.

He also noted that proceeds from the recent Eurobond issuance will add some 3.9 per cent of GDP to the debt stock.

He however noted that growth in broad money (M2+) picked up in the first two months of 2019, partly reflecting base drift effects arising from the banking sector clean-up exercise.

“Annual growth M2+ was therefore reported at 22.4 per cent at end-February 2019 compared to 12.2 percent in the same 5 period of 2018. The increased pace of growth in total liquidity mainly reflected expansion in Net Domestic Assets, moderated by sharp contraction in the Net Foreign Assets. Annual growth in Reserve Money however slowed to 9.3 per cent in February 2019 compared with 22.7 per cent annual growth in the same period of last year,” he said.

By Emmanuel K. Dogbevi
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