So let's correct an impression, I think the last time we issued our calender, there was anxiety that we are borrowing GHC25.4million.
The minister of Finance Seth Terkper, has defended government's decision to borrow about GHC25.4 billion in debt in the first half of 2015. This was the amount borrowed from the domestic market through bonds and treasury bills.
Government's domestic debt in the first half of the year is twice the amount borrowed in the first half of 2014. The IMF has described Ghana as a high-risk distress country due to its debt to GDP ratio.
Minister Terkper is defending the country's debt situation saying, the money accrued from the issuance of these bonds and treasury bills have been used to refinance earlier debts, and does not necessarily mean that government's debt situation has worsoned.
" We will like to dedicate a big chunk of this year's issuance to finance debt from the short-end so we don't have to go to the short end to refinance. Refinancing is a major activity all over the world in our debt management portfolio. So let's correct an impression, I think the last time we issued our calender, there was anxiety that we are borrowing GHC25.4million. I must say that a substantial amount of that is roll over, that is, they are monies being used to finance maturing debt."
The finance minister then emphasized, in his economic update about the economic situation of the country in the wake of challenges from falling world commodity prices of major export earners like oil an Gold, that the national debt situation is not getting worse because monies being borrowed are being used to pay older debt.
" Debt servicing increase because of changes in interest rates. But the real debt really hasn't changed much because we are just exchanging debt, not adding", Seth Terkper added.
The debt trajectory for the second half of the year, which includes the floating of more domestic bonds treasury bills, and other long term government instruments, will all ensure that government's debt hit GHC50 billion by the end of the year.
The finance minister, on Wednesday August 13, announced government's decision to float a five-year domestic bond to raise GHC500 million in the month of August.
Experts have cautioned government against the excessive borrowing as the current debt trajectory will see government borrow more that GHC50 billion by the end of 2015. This will then escalate Ghana's total debt, which many have described as dire, from the current GHC90 billion to over GHC130 billion by the end of 2015.
August is set to be the month in which government will borrow the most. Pulse.com.gh aggregation of all the loans and instruments reveal that government will borrow over GHC5.5 billion in August alone. This includes the GHC500 million 5-year domestic bonds, the $1.8 coca syndicated loan and the $1.5 billion Eurobond.