Ghana’s debt stock has increased from GHC 142 billion in 2017, to GHC 170bn in 2018, constituting 70% of the country’s GDP.
This is according to the 2019 Budget Statement and Economic Policy document presented by the Finance Minister, Ken Ofori Atta to Parliament on Thursday.
Presenting the statement, Mr. Ofori-Atta said the high increase in the public debt was a result of the government’s financial commitments in cleaning up the financial sector.
“Mr. Speaker, the nominal public debt stock as at end September 2018 was GH¢170.8 billion, comprising external and domestic debt of GH¢86.6 billion and GH¢84.1 billion, respectively. The overall rate of debt accumulation in 2018 is 19.8 percent, driven primarily by the cost of the clean-up of the financial sector, involving resolution of the seven (7) defunct banks. The rate of debt accumulation would have been 11.5 percent without the clean-up exercise,” he said.
“Mr. Speaker, public debt (including financial sector bailout) as a percentage of GDP stood at 70.7 percent at the end of September 2018 compared with 69.2 percent during the same period in 2017. The public debt stock (excluding the financial sector clean-up cost) as a ratio of GDP is 66.5 percent. In terms of the rebased GDP, the public debt to GDP ratio is 57.2 percent (including financial sector clean-up cost) and 53.9 percent (excluding clean-up cost),” he added.
At 70.7%, Ghana has gone past the dreaded 70 percent of GDP point the International Monetary Fund (IMF) has constantly cautioned the country against.
Despite the figure quoted by the Minister, IMF data shows that Ghana’s debt to GDP ratio now stands at 71.2%.
Effectively, every citizen of Ghana’s about 29 million population, owes nearly GHS 5,600.
Gov’t targets GHS 58.9bn domestic revenue collection in 2019
Meanwhile, Mr. Ken Ofori-Atta has announced a revenue target of GHS 58.9 billion for the year 2019.
The figure represents 17.1 percent of the rebased GDP, which stands at 256.7 billion Ghana Cedis for 2017.
Compared to the 2018 revised revenue and grants target of 50.68 billion Ghana Cedis, the 2019 target of 58.9 billion Ghana Cedis represents a 13.96 percentage increase.