Debt accumulation rate, deficit lowered – Ofori-Atta

Ghana’s macroeconomic performance has been robust, Finance Minister Ken Ofori-Atta has said, adding that the government has lowered the rate of debt accumulation since 2017 following what he describes as the prudent management of the economy, which has led to a successful reduction of the country’s fiscal deficit.

In a wrap-up statement at the close of the debate on the government’s policies in the 2020 budget, Mr Ofori-Atta told Parliament on Tuesday, 26 November 2019 in Accra that the discourse on the public debt should focus on the ability of the economy to sustain the debt burden.

“From end-2016 and now, the debt-to-GDP ratio has increased from 56.8% to 57.4% (excluding the financial sector bailout). This means in three years, we have only marginally increased the debt to GDP by 0.6 percentage points. It is, therefore, erroneous to simply focus on nominal increases in the debt stock”, he told the MPs.

Mr Ofori-Atta said contrary to suggestions from some quarters, the Akufo-Addo administration has rather lowered the rate of debt accumulation in the last three years compared to 51.6% in 2014 to 56.8% in 2016; representing an increase of 5.6 percentage points compared to 0.6 percentage points from end 2016 to date.

“This sustainable debt path is partly on the back of our successful fiscal consolidation programme, which reduced the fiscal deficit by 2.6 percentage points from 2016 to 2018”, he added.

On the allocations made toward the improvement of road infrastructure, Mr Ofori-Atta said: “We have allocated an amount of GHS2.2 billion for road construction, comprising GHS1.2 billion from ABFA and GHS1 billion from foreign-financed sources. In fact, this allocation is unprecedented in the history of road transport in Ghana! The first phase of the Sinohydro projects will be implemented in 2020. Other road projects will be implemented. A good number of the road projects are expected to be implemented over the medium term and, therefore, allocations are made in the outer years to complete the road projects”.

The Finance Minister repeated that the 2020 budget will focus on consolidating the country’s impressive macroeconomic gains for growth, jobs and prosperity for all Ghanaians.

He said the Akufo-Addo administration, in its three years, has laid the foundation for a stronger economy and urged the house to unanimously pass the ‘Nkosuo and Nkabom’ Budget.