Ghana passes threshold of debt to GDP ratio

According to figures from the Bank of Ghana, the country’s total debt stock now stands at GHc94.5 billion, representing 70.9% of Gross Domestic Product (GDP).

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Ghana’s total debt stock has increased by GHc5 billion more, between May and June 2015.

This was contained in the BoG’s summary of economic and financial data for September 2015.

The International Monetary Fund (IMF) report after reviewing Ghana’s performance under the Extended Credit Facility program said, Ghana’s total public debt now exceeds pre-HIPC levels.

The IMF is projecting that Ghana will end the year 2015 with a 75% debt-to-GDP ratio.

Ghana’s total public debt in the first half of the year has increased consistently by about GHc15.1 billion, growing from GHc79.4 billion in January, to GHc94.5 billion in June.

Meanwhile government has sought to assure that the rate at which it is borrowing, will not harm the country, and that, it is engaging in what it described as “smart borrowing.”

In May, the country’s total debt stock stood at 89.5 billion cedis which was 67.1% of Gross Domestic Product (GDP).

According to the Bank of Ghana, the country’s external debt stock has also increased by GHc4.8 billion, between May and June and currently stands at GHc58.6 billion representing 44% of GDP.

Total domestic debt stock also increased by 200 million cedis between May and June.

According to the central bank, the total domestic debt stock as at June, stood at GHc35.9 billion, representing 26.6% of GDP.

Government has given the assurance that the impact of the new loans it is contracting, will be minor since they are all concessionary loans.

A Deputy Minister for Finance, Cassiel Ato Forson, said “looking at the rate of adjustment that the country is going through, our debt is under control, we are actually going through a series of adjustments from where we were.”

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