Finance Minister Ken Ofori-Atta has revealed that the country’s debt has shot up.
“Mr. Speaker, the nominal public debt stock as of the end of September 2018 was GHS170.8 billion, comprising external and domestic debt of GHS86.6 billion and GHS84.1 billion, respectively,” Mr Ofori-Atta noted during the presentation of the 2019 Budget Statement and Economic Policy of the government on the theme: “Putting Ghana Back to Work”.
He said the overall rate of debt accumulation in 2018 is 19.8 per cent, driven primarily by the cost of the clean-up of the financial sector, involving the resolution of the seven defunct banks.
Mr Ofori-Atta added that: “The rate of debt accumulation would have been 11.5 per cent without the clean-up exercise”.
The Finance Minister further revealed that the public debt (including financial sector bailout) as a percentage of GDP stood at 70.7 per cent at the end of September 2018 compared with 69.2 per cent during the same period in 2017.
“The public debt stock (excluding the financial sector clean-up cost) as a ratio of GDP is 66.5 per cent. In terms of the re-based GDP, the public debt-to-GDP ratio is 57.2 per cent (including financial sector clean-up cost) and 53.9 per cent (excluding clean-up cost),” he stressed.
He highlighted that following the establishment of the ESLA bond programme in 2017, the government has steadily settled over GHS5 billion in legacy debts and aged payables towards the goal of a financially viable and competitive power sector.
He said an audit exercise is currently underway to validate the aged payables that were not considered under the ESLA bond.
“Once confirmed, the government will intervene with a combination of cash and bonds to pay off the valid debts. This measure will improve the liquidity position of the energy sector State Owned Enterprises (SOEs) and ensure long-term financial viability,” he concluded.