The country’s public debt has increased to GH¢ 200 billion in May this year as the government continues to borrow to finance public infrastructure and other statutory obligations.
The Governor of the Bank of Ghana (BoG) Dr Ernest Addison who announced this at the 89th regular meeting of the MPC said the current public debt stood at 58.1 per cent of Gross Domestic Product (GDP).
“Of the total debt stock, domestic debt was GH¢94.6 billion (27.5 per cent of GDP), of which GH¢11.0 billion (3.2 of GDP) represented bonds issued to support the financial sector clean-up while external debt was GH¢105.4 billion (30.6 per cent of GDP).
He explained that the country’s public debt as of May last year stood at GHC153.4 billion constituting 51.0 percent of GDP.
Dr Addion said provisional data for the first five months of 2019, showed an overall budget deficit on cash basis of 3.0 per cent of GDP against the target of 2.4 per cent of GDP, saying the deficit, excluded some legacy energy related payments of about 0.7 per cent of GDP.
“The higher-than-expected revenue outturn against increased pace of spending. The revenue shortfalls were mainly from international trade taxes. Over the review period, total revenue and grants amounted to GH¢18.5 billion compared to a programmed target of GH¢21.5 billion, indicating an annual growth of 7.6 per cent,” he said.
The chairman of MPC said total expenditures, however, reached GH¢28.6 billion, marginally below the target of GH¢29.7 billion, and representing 25.2 per cent annual growth.
“The committee… observed that the pace of fiscal consolidation has slowed down, mainly reflecting gaps in revenue mobilisation while the pace of spending has increased. This could pose risks to macroeconomic stability if not addressed,” he said.
The governor said the MPC “expects that some corrective measures will be announced in the mid-year budget review” to “help address the financing gap challenges as well as manage the risks from the large unbudgeted energy sector related payments that could adversely impact foreign exchange reserves and undermine the macro stability gains made so far.”
By Kingsley Asare