The Finance Minister, Seth Terkper in his midyear budget review statement in Parliament, disclosed that the current debt stock of the country stood at ninety billion Ghana cedis representing 67.53 per cent of GDP
Figures from the Bank of Ghana reveal that government has exceeded it’s borrowing target for the first half of the year. Government’s borrowing behaviour has received a lot of criticism from economists and the opposition New Patriotic Party as the country’s public sector debt hit GHC 89.5 billion – equivalent to 67.5 percent of GDP as at May 2015.
This led to an ambitious decision government in the 2015 budget to set a target of 6.2 percent to GDP by the end of 2015.
However, figures from the central bank reveal that government has exceeded its borrowing target for the first half of the year by more than GHC 763 million, further deepening concerns about the country’s debt position.
According to the figures, government borrowed a little above GHC 26.18 Billion in the first half of the year which is more than the Ghc 25.42 billion it had planned to borrow from the domestic securities market for the first half of 2015.
The borrowings of government do not include the debts incurred by the Bank of Ghana and COCOBOD, which together also borrowed GHC 3.9 billion within the period. The latest borrowing figures are likely to heighten concerns about government’s efforts to reduce the ballooning wage bill. The big question now, is whether government will meet its target of debt to GDP ratio of 6.2 percent.
Spokesperson for the country’s biggest opposition on the Parliamentary select committee on finance, Dr. Anthony Akoto Osei has warned that the government’s expanded borrowing and spending would overburden the Ghanaian taxpayer with more debt servicing for the country.
According to Dr. Akoto Osei, the country’s debt servicing cost alone this year may hit GhC 12 billion, which will be more than the projected wage bill.
"If we are not careful, we may go a way, where debt servicing will be higher than the wage bill’, he warned.
Dr. Akoto Osei said this at a press conference organized by the biggest minority in Parliament in Accra too explain the Finance Minister’s request for Parliamentary approval for request for additional spending of GHC 65 million, they argued that the country’s public debt is anything but sustainable.