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Finance Minister Ken Ofori-Atta and Vice President Mahamudu Bawumia
Data from the Bank of Ghana (BoG) shows that the outstanding public debt rose from 139.3 billion GH ¢ in November 2017 to 172.9 billion GH ¢ last November..
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In nominal terms, this shows that the country added 33.6 billion GH ¢ to the stock of debt during the period.
As a percentage of gross domestic product (GDP), which measures the value of all goods and services produced over the course of a year, the November 2018 debt stock equals 57.9% of GDP and that of 2017 to 54.3% of GDP.
The new ratios are based on rebased GDP figures, which saw the economy grow by 24.7% in 2017.
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The BoG released the data on Jan. 26 after the close of the first meeting of the Monetary Policy Committee (CPM) for 2019 the day before.
Dr. Ernest Addison, governor of the central bank, must inform journalists of the decision taken by the committee on its key rate, the key rate.
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Composition of the debt
The data showed that debt growth over the period was fueled more by the domestic component.
While domestic debt rose from £ 64.2 billion in November 2017 to £ 86.5 billion in November 2018 (34.7%), external debt rose by 14.3% over the course of the year. same period. According to the data, it went from GH ¢ 75.1 billion in November 2017 to GH ¢ 86.3 billion last November.
Tight corner
Said Boakye, an economist and researcher at the Institute for Fiscal Studies (IFS), said in an interview that the debt situation showed that the country was still in a difficult situation because "the loan is very quick".
He added that the rebased GDP had managed to mask the growth of the debt-to-GDP ratio, thus creating a false impression of falling.
According to a rough estimate, the economist said the current stock of debt would have accounted for 72.4% of GDP with the old series.
"It does not drop at all because the loan is very fast," he said.
Expansionary budget
Mr Boakye said that it was worrying that the future of the debt was dark, especially that it was only in the two years of government.
"This year 2019, it could even increase because the budget is a little more expansionary than the previous one," he said.
Last November, Finance Minister Ken Ofori-Atta unveiled an ambitious budget in which the government plans to spend an additional 15.62 billion GH ¢ and a budget deficit of 4.2% of GDP this year . The budget also aims for a growth rate of 7.6% at the end of the year.
The projected increase in spending for 2019 is explained by the 2017 and 2018 budget bindings, during which total expenditure increased by 5.8 billion and 5.8 billion GH, respectively, according to the badyzes. two budgets.
With projected earnings lower than expected, Boakye feared it would be "the same story of borrowing to spend."
"The only thing this government has done is that they respect this
Exit
Asked how the country could handle the situation, Dr. Boakye said the government should be ready to tell the people the reality the country was facing.
This, he said, requires the government to reduce spending by staggering the implementation of its commitments to the people.
The IFS researcher previously warned against the full launch of the government's free program for high school and other fixed-cost programs that could strangle the budget.
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