Prime News Ghana

Akufo-Addo has kept his promise of reducing rate of borrowing - Bawumia

By Justice Kofi Bimpeh

Vice President Dr Bawumia says President Akufo-Addo has kept his promise of reducing the country's rate of borrowing as compared to the previous NDC administration.

Speaking at a town hall meeting at Kumasi in the Ashanti Region to account for the various campaign promises made to the people of Ghana, Dr Bawumia said better economic management and fiscal discipline has put the economy of Ghana on the right path.

Addressing issues of the country's total debt stock which has hit  214.9 billion as at November 2019, Dr Bawumia explained that during their three years in office the country's debt stock increased by 79 percent as compared to the 247 percent from 2012 to 2016.

READ ALSO : Ghana’s public debt stock hits GHS214.9bn

With his calculation, the debt stock which also included the banking sector cleanup would have been at 203 billion cedis without the banking sector cleanup cost.

He strongly attributed the success to a positive primary balance and fiscal discipline in the economy.

"Let us look at what has happened to the debt as a result of this fiscal discipline that we have imposed on yourselves in achieving the positive primary balance. The total public debt has increased from 122 billion Cedis in 2016 to 214.9 billion in 2019 that is 9.3 percent of GDP at the end of November 2019, but this includes the cost of the banking sector cleanup which you know is over 13 billion Cedis and counting, excluding the cost of the banking sector cleanup the debt stock stands at 203 billion cedis however if you look at these debt dynamics the strong physical adjustment that has taken place and better debt management has meant that the rate of debt accumulation has slowed down considerably to the lowest in a decade. Between 2008 and 2012 Ghana debt stock increase by 267%, between 2012 and 2016 Ghana debt stock increase by another 247% but between 2017 and 2019 the increase has been by 79 percent so there is a big difference."

Dr Bawumia, therefore, believed that the NPP government led by President Akufo-Addo has kept their promise to the Ghanaian people to reduce the rate of borrowing.

"So you are seeing that there is a fiscal discipline the is being implemented there is a big difference between before 2017 and after 2017, so the government of Akufo-Addo has therefore kept its promise to reduce the rate of borrowing that was taking place before we came into power.."

Ghana’s public debt stock hits GHS214.9bn

The country’s total debt stock has hit GH¢214.9 billion ending November 2019.

This was contained in the January 2020 Bank of Ghana’s summary of financial and economic data released Friday.

This was released after the Monetary Policy Committee met earlier this week to review the health of the economy and set a new policy rate for the market, which currently stands at 16 per cent. The rate often influences the cost of credit in the country.

The GH¢214.9 billion total debt represents 62.1 per cent of Ghana’s-Debt-to-GDP ratio ending November 2019.

The $20.3 billion (GH¢111.9 billion) of the debt were borrowings done by the government in dollars and from outside the country (that is the external debt component). This represents 32.4 per cent of the country’s GDP.