Ghana’s total debt stock hits GH¢154 billion

The country’s total debt stock has reached GH¢154 billion May ending, according to a provisional data from the Bank of Ghana.  

The provisional data shows that stock of debts has gone up by Gh¢9 billion in three months from February 2018. 

The Bank of Ghana in February this year put the public debt at GH¢145 billion based on its summary of Economic and financial data.

Impact on GDP

According to the fiscal data seen by JoyBusiness, the provisional debt stock of GH¢154 billion would translate into 63.7, per cent of GDP at the end of May 2018 compared to 66.8 per cent for the same period in May 2017.  

From the data, it is clear that there has been some reduction in terms of the Debt-to-GDP. 

For instance, as at the end of December 2017, the Debt-to-GDP was 69.8 per cent.  This should mean the country is making some progress in moving away from the dreaded 70 per cent mark, which could result in the country being tagged as highly “Debt distress Country” or having challenges in paying our debt back on time. 

However, some economists have also argued that the country is witnessing some improvement in the Debt-to-GDP ratio because the economy is expanding.

Reasons

It is not clear for now what might have caused this spike, but persons with knowledge of the debt numbers are attributing it to the cedi’s depreciation and some fresh borrowings by the government.

Borrowings for the half year

According to government’s issuance calendar for the first half of this year, it borrowed about ¢22.4 billion through bonds and Treasury bills.

However, only ¢4.6 billion can be classified as fresh borrowings which were used to meet the government’s financing needs.

The remaining ¢17.8 billion was used to finance debts that were maturing or “rollovers”. The calendar showed that it took ¢11.3 billion in the second half of this year and ¢11.1 billion in the second quarter of this year.