Despite the public debt rising to GHS214.9 billion as at November 2019 and recent warnings of the country likely crossing the high risk of debt distress threshold, Vice President, Dr. Mahamudu Bawumia, says the rate of debt accumulation over the last three years is the lowest Ghana has achieved in a decade.
The New Patriotic Party in its 2016 manifesto specifically promised “savings from the reduction of interest rates paid on the country’s debt stock.”
This formed part of a broader strategy to improve Ghana’s macroeconomic stability.
Addressing a town hall meeting in Kumasi on Tuesday, the Vice President, noted that there has been “significant progress” in this regard because other promises, like the realisation of the Fiscal Responsibility Act, had been met.
“The strong fiscal adjustment that has taken place and better debt management meant that the rate of debt accumulation has slowed down considerably to the lowest in a decade.
Between 2008 and 2012, Ghana’s debt stock increased by 267 percent.
Between 2012 and 2016, Ghana’s debt stock increased by another 243 percent.
But between 2016 and 2019, the increase has been by 79 percent.
So there is a big difference.”
He further attributed the decline in fiscal deficit on a cash basis from 6.8 percent of rebased GDP in 2016 to 3.8 percent in 2018, 4.8 percent in 2019, to these promises.
The primary balance surplus was 0.5 percent of GDP in 2017, 1.4 percent in 2018 and 0.9 percent in 2019 compared to a deficit of 1.1 percent in 2016.
This is contributing to a slower rate of debt accumulation which Dr. Bawumia said means they are “implementing good fiscal management and prudent fiscal management.”
The total public debt has increased from GHS122 billion in 2016 to GHS214 billion in November 2019 representing 62.2 percent of GDP.
But Dr. Bawumia reminded Ghanaians that the increased debt included the cost of the banking sector cleanup which is over GHS13 billion.
Source: Fiilafmonline/CitiNews
