The country’s total debt stock witnessed a significant increase in two months ending September 2018 as it went up by ¢11 billion to ¢170.8 billion, according to data released by the Central Bank.

The last time the Bank of Ghana (BoG) released its economic and financial data, it put the total debt stock ending July 2018 at ¢159.4 billion.

Breakdown of the September debt

According to the data from BoG, $18.1 billion of the public debt were secured from outside the country, while ¢84.2 billion came from domestic sources.  The ¢170.8 billion debt represents 57.2 percent of the total value of the Ghanaian economy that is 57.2 percent debt-to-GDP ratio.

Possible reasons for the significant increase in the debt stock

There are no official reasons for now as to what caused the debt numbers to increase by ¢11 billion.

However, persons with knowledge of government’s borrowing have attributed the situation to funds used for the recent banking sector bailout as well as some challenges with the cedis’ depreciation over the past months.

According to the 2019 budget, the public debt including the financial sector bailout costs at the end of September 2018 was 57.4 percent of GDP, excluding bailout costs, the debt was 53.9 percent of GDP.

Should we be worried?

Some economists say based on fact that the economy has been rebased and the country has been able to build more assets to cover these debts, there is no cause for alarm, for now.

The data, for instance, showed that the country has moved away from the dreaded 70 percent mark, regarding Debt–to-GDP ratio to about 57.2 percent. 

Government’s projected borrowings through bonds and treasury bills for 2018

According to the borrowing calendar for 2018, government is likely to end the year taking about ¢45 billion cedis through bonds and treasury bills.

Data from the Finance ministry shows that it has already taken ¢22.4 billion in the first half of this year.

From the first quarter numbers, 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. Also, ¢11.3 billion was taken in the third quarter of this year.

The calendar which captures government’s operations for October to December shows that the Finance Ministry would be borrowing 12.8 billion cedis through bonds and treasury bills for the last quarter of this year.

Developments in other sectors of the economy

The Bank of Ghana data also revealed that the country’s earnings from exports ending October stood at $12.5 billion, compared to the $11.5 billion raised in the same period for 2017.

Gold fetched ¢4.8 billion compared to the ¢4.8 billion got in 2017, while cocoa brought in $1.6 billion as compared to $2.1 billion dollars, secured in October 2017.

Crude Oil exports earned the country $3.8 billion as compared to the ¢2.3 billion last year.

On the import side, government spent government spent $8.7 billion to finance non-oil imports, a similar amount was spent in the same period in 2017.

For oil imports, $2.1 billion was used to facilitate the import of all the various petroleum products that the country needs.