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Bawumia lists factors accounting for Ghana's high debt

By PrimeNewsGhana
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Vice President Dr Mahamudu Bawumia at a forum held by TESCON, students wing of the New Patriotic Party (NPP) listed some factors accounting for Ghana's high debt stock.

According to him, Covid expenditure, the banking sector clean-up exercise, and payment of excess power in the energy sector as factors accounting for the rising pubic debt.

He explained that the spending during the Covid to attend to the health needs of Ghanaians in all these areas cost the government ¢50.1billion.

But for the banking sector and the Excess Energy payment, he said the debt would be hovering around 68 per cent instead of the 81 per cent.

“Between 2019 and 2021 Ghana’s debt to GDP increased by 17.6 percentage points of GDP. It should be noted that without the 15.1 billion of the exceptional items – the financial sector and then the energy and Covid Ghana’s debt to GDP would have been about 68 per cent instead of the current 80 per cent,” he said.

Ghana’s public debt stock has reached GH¢351.8 billion in December 2021 from an earlier GH¢344.5 billion recorded in November 2021.

This is according to the’Bank of Ghana's March 2022 Summary of Economic and Financial Data.

The central bank's figures showed the increase in the country’s public debt stock in terms of Gross Domestic Product represents 80.1 percent.

The data further revealed that Ghana added about GH¢730 million in fresh loans to the total public debt stock in December 2021.

Per the figures, the increase can partially be attributed to the depreciation of the cedi in the last two months of 2021 – a move that has further increased the external debt component.

The Bank of Ghana, touching on the external component of Ghana's total public debt, said the figure increased in December 2021 to US$28.3 billion (GH¢170.0 billion) from US$27.9 billion in November 2021.

This, in terms of the debt-to-GDP ratio, was equivalent to 38.7 percent.

On the domestic debt front, the Bank of Ghana's figures showed a rise to GH¢181.8 billion in December 2021 from an earlier GH¢179.4 billion recorded in November 2021.

This was however equivalent to 41.4 percent of Gross Domestic Product.