NPP borrows GHc16.8 billion in first year of office

Financial data from the Bank of Ghana (BoG) shows that- the current government in just one year added GHc16.8 billion to the country’s debt stock.

This is about GHc5 billion higher than what former President, John Mahama added in his first year of office According to the data, Ghana’s total debt stock is GHc138.8 billion,
making (68.7%) of gross domestic product (GDP).

Of the total debt stock, domesti debt went up by 20.1% to GHc64.2 billion, while external debt rose by 7.9% to hit GHc74.7 billion. This
included the US$2.5 billion energy
domestic bond.

However, in 2013,under President Mahamas first year administ ration,the total public sector debt stock as at the end of September 2013 was GHc46.1 billion (53.5%) of GDP up from GHc35.1 billion at the end of December 2012,Between December, 2012 and September, 2013, former President Mahama’s administration added about GHc11 billion to the total debt stock, as against the GHcl6.8 billion the Nana Akufo. Addos administration added to the country’s debt stock.

Prof John Gatsi, Head,
Department of Finance- School of
Business at the University of Cape
Coast, describes the current debt
tock as high.
“As far back as 2016, the debt
stock was GHc122 billion, We
cried that it was too high and
indeed it was too high. We
expected that debt accumulation
will be moderated. In terms of
trajectory, v
may say that the
ccumulation is
on downward
trend, but the
debt stock is not
on downward
trend”
According to
Ghana’s tota
is GHc138.8
making (68.7
gross domes
(GDP). Of th
stock, dom
went up by 2
He further
stated that
looking at the
increase of
about GHc16.8
billion to the
debt stock in
one year, it
GHc64.2 bill
means that
external deb
7.9% to hit G
billion. This i
we are not able US$2.5 billio
domestic bo
the velocity
of our debt is
very fast and
to march the
accumulation
of that debt
to strategic
infrastructure in the country, and
that is a key concern.”
Prof. Gatsi believes that the
buntry’s inability to manage the
exchange rate is also having an
effect on the debt sto “This IS
because some of the debts are
in foreign currencies. If the
exchange rates are not good, it
will automatically increase the
size of the debt stock in Ghana

cedi terms,” he mentioned, adding
that in order to engage in proper
debt management, the government
must consider all those things.
The economist said “the GDP is
growing and what it means is that
all things being equal there may
be a dow nward trend in the debt to
GDP ratio”
“But the point is that you don’t
go to the creditors and pay debt to
GDP ratio. It is your debt stock that
is the issue. So our debt stock is
actually rising”
He said the rise in the debt stock
could be a reason the Finance
Minister, Ken Ofori Atta failed
to mention it in the 2018 Budget
Statement in Parliament as well as
the President’s inability to mention
it at the recent Meet-The-Press
event.

By: Fred Yaw SARPONG/Daily Express