Economist Welcomes Debt Redesign to GH ¢ 172.9 Billion

Company News on Tuesday, January 29, 2019

Source: citibusinessnews.com

2019-01-29

Economist Professor Eric Osei Assibey has suggested that the government's reshuffling of the debt could have a positive impact on reducing the country's debt.

According to him, some intermediate improvements in the economy could have a greater impact if the plan were maintained.

Professor Assibey's observations are based on the latest data from the Bank of Ghana, which shows that the country's debt reached 172.9 billion cedis in November 2018.

"Treasury bill rates went from about 17.5% two years ago to about 13%. Because it reduces the burden of the government's liquidity, defers maturing debts and forces the government to borrow to settle short-term debts. "

"Seven- and ten-year bonds have much higher interest or yield than short-term bonds and it's good for the government because investors tend to be attracted by higher interest returns." especially when inflation is expected to fall, "he said. Citi Business News.

Data from the central bank showed that C $ 172.9 billion debt also accounted for 57.9% of the total value of all goods and services produced in the country in the past year.

An badysis of the figures by the central bank shows that this figure increases every month.

For example, last February, the debt amounted to 146.7 billion cedis, which rose gradually to 172.9 billion cedis.

Although the government has repeatedly borrowed or announced borrowing intentions, it has always maintained that the funds must be used to pay off maturing debts and extend the shorter ones.

Meanwhile, for the first quarter of this year, the government intends to borrow 11.25 billion cedis.

Of this amount, 10.14 billion cedis should be used to refinance maturing debts, while the remaining 1.1 billion cedis will be used to cover the government's financing needs and build up a reserve for the period.