Public debt stock hits ¢145bn under Akufo Addo

The country’s debt stock has reached ¢145 billion ending February 2018, the latest Summary of Economic and Financial Data released by the Central Bank of Ghana has shown.

This was released after the Monetary Policy Committee of the Bank of Ghana (BoG) met this week to review the health of the economy.

However, when this debt is expressed as a percentage of the value of the economy which is said to be a little over ¢200 billion, then it’s now 60 percent, or let’s say the debt –to-GDP stands at 60 percent.

This represents about 9.8 percent reduction from the country’s position of 69.8% at the end of December 2017.

The development can be attributed to what some are describing as “expansion” of the economy over the past months or the strong growth recorded.

Details of the debt stock

The report showed that from December 2017 to the end of February the debt stock in “nominal terms” went up by ¢2.5 billion from January to February 2018.

It’s not clear for now might have caused the increase, whether it was as a result of fresh borrowings or the cedi’s marginal depreciation might have caused this increase.

According to the data, External debt ending February 2018 stood at ¢17.4 billion, in dollar terms and ¢76.9 billion when converted into the local currency.

This showed that, it has gone up marginally compared to the ¢75.8 billion in December 2017. In terms of Debt-to-GDP for the External debt, it stood at 31.8 percent.

Domestic debt stood at ¢68.2 billion, representing a Debt-to-GDP ratio of 28.2 percent. Now the increment of the debt stock in dollar terms was about $1.1 billion and ¢1.5 billion for the domestic debt.

Government’s borrowing for the first half of this year

According to government’s issuance calendar for the first half of this year, it borrowed about ¢22.4 billion through bonds and Treasury bills.

However, only ¢4.6 billion can be classified as fresh borrowings which were used to meet government’s financing needs.

The remaining ¢17.8 billion was used to finance debts that were maturing or “rollovers”. The calendar showed that it took ¢11.3 billion in the second half of this year and ¢11.1 billion in the second quarter of this year.

Performance of other sectors

The country secured $5.5 billion as earnings from the exports of Gold, Cocoa and Oil from January to April this year.

The economic data showed that Gold brought in $1.9 billion, compared to $2.1 billion secured in the first quarter of 2017.

Cocoa realized $1.1 billion for the first four months of this year, compared to 1.3 billion secured in the first quarter of 2017.

Oil brought in $1.4 billion in terms of earnings for first quarter of 2018, however, compared to the same period for last year, the country only got $845 million.

Expenditure on Imports

According to the Data, Ghana spent ¢4.3 billion to finance its imports for the first four months of this year. 880 million was used to finance the country’s Oil imports, while Non- Oil import accounts for $3.5 billion.

Now compared to the first four months of 2017, the country spent 3.1 billion dollars. The Development resulted in a trade balance of $1.1 billion.

The country’s international reserves ending April 2018 stood at $6.9 billion, representing 3.8 months of import cover.

But if you compare it to the $8.2 billion in first four months of 2017, then it’s clear that there has been some significant decline.

Government’s fiscal operations

From the data, it’s clear that revenue numbers are picking up based on the numbers that the Bank of Ghana has put in terms of revenue as expressed in GDP.

Banking sector performance

From the report, Total Non-Performing loans (NPLs) for the industry or loans that banks fear might go bad appeared to be increasing and it stood at 23.4 percent ending April 2018, compared to 19.8 percent for the same in 2017.

However, excluding the loss category, NPLs reached 12.3 percent. The development showed that commercial banks are still struggling in containing bad debts or loans that they fear might go bad.

Industry capital adequacy ratio represents a marginal increase from what was recorded in the same period for last year.

Even though in nominal terms, total industry deposits and lending had gone up, now compared to real growth for the same period of last year, there were a lot of question marks.

For instance, total lending ending April this year stood at ¢36.8 billion, representing a growth of 2.2 percent , compared to a 16 percent growth for the same period of last year.