Business News of Thu, 20 Apr 20172
IMF optimistic gov't’s debt management strategies would help reduce public debt
The International Monetary Fund (IMF) says it is optimistic the Akufo-Addo government’s debt management strategies would help reduce the Public debt.
In its Fiscal Report, the Fund, however, said the country will end the year without making significant progress in reducing its debt-to-GDP ratio.
Government was hoping to end the year with a debt-to-GDP of about 70 percent based on some new debt management strategies it plans introducing.
The country’s debt stock as a percentage of the total value of the economy over the years has been a concern for the country’s development partners, donors, and rating agencies because of its impact on government expenditure, the cost of credit, and economic growth.
According to the 2017 budget, government is planning to spend a little over GH10 billion as interest payment on loans.
Ghana was recently classified as high-risk, debt distress country by the IMF because of the country's rising debt stock which stood at GHS122 billion as of December 2016.
It is being suggested the December debt stock of GHS122 billion is a provisional figure because the current government says it is carrying out an audit of some expenditure by the previous administration which was not reported.
Speaking to JOYBUSINESS after the release of the fiscal Monitor Report in Washington D.C, Deputy Director at the IMF’s Department of Monitoring, Catherine Pattillo said the debt management strategies being deployed by the government take a while before their impact can be felt.
The IMF, for instance, is projecting a debt -to-GDP-ratio of almost 67 percent in 2018 which the Fund says shows that the debt reduction measures are working.
This could move the country out of high risk, debt distress situation, which could lead to some reduction in the cost of borrowing for government.