We currently owe GHC 304 billion - John Kumah explains Ghana's debt situation

John Kumah, a Deputy Minister of Finance has disclosed that Ghana’s current debt stands at a whopping GHS 304 billion.

John Kumah

According to the Member of Parliament for Ejisu, this sum encompasses both the internal and external debts of the country.

In an interview with Paul Adom-Otchere on Good Evening Ghana on Metro TV, Hon. Kumah said Ghana’s internal debts represents 51 percent of the total while the external debts represent 49 percent of the total figure.

“The last figure I saw was 304 billion cedis. We have a domestic part and we have a foreign part. The domestic is about 51 percent and it is what we owe to our banks, SSNIT and those who buy government bonds and we have 49 percent as external and that’s from those who buy the Euro bonds and monies we owe the IMFs and the World Banks.”

The deputy minister admitted that the current debt stock is 77 percent of Ghana’s Gross Domestic Product (GDP), but he disagreed that the government has failed in its pledge to reduce borrowing.

He contends that Ghana’s debt to GDP was around 66 percent till COVID-19 struck, therefore the astronomical increase can be attributed to the pandemic which has become normal for most countries in the world.

“Globally, most countries debt stocks have risen due to COVID-19. The US had to create $1.9 trillion to shore up the economy. It is not only America. Everywhere. Canada, Germany, Italy; every country today as we speak is not talking about its debt. It is only Ghana we are concerned about debts because the first objective is to preserve your population. You have to make sure you sustain your economy”, he argued.

Ghana’s total public debt stock has increased once again according to new data released by the Bank of Ghana.

The debt stock which ended the first quarter of 2021 at GH¢ 304.6 billion, increased by almost GH¢ 30 billion in April and May.

This saw Ghana’s total public debt as of the end of May 2021 rising to GH¢ 332.4.

The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.6% as of the end of May.

This is the highest recorded so far in the past year, slightly higher than the debt to GDP ratio of 76.1% recorded at the end of 2020 according to data from the central bank.

A breakdown of the debt numbers shows that the component of the debt secured outside the country after remaining relatively stable in the first quarter rose significantly by about GH¢ 20 billion from GH¢ 141 billion at the end of March 2021 to GH¢ 161.5 billion at the end of May this year.

The external debt component as of the end of May 2021 made up 37.2% of the total value of the economy, which is projected to be about GH¢ 434 billion for 2021.

Watch his explanation below

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