Gov't borrows GHC6.2bn more in just 3 months

Data from the Bank of Ghana (BoG) indicates that Ghana’s public debt went up by GHC6.2billion between July and September, 2016.

According to the summary of economic and financial data released by the bank, the country’s total debt stock reached GHC112.4 billion as at September this year.

rt from government’s unbridled appetite for borrowing, other factors such as the cedis’ marginal depreciation and possible delays in interest payments could have resulted in the debt numbers recording such a significant increase.

Ghana’s total public debt grew from GHC100.2billion in December 2015 (representing 71.6 per cent of GDP) to about GHC105.1billion by the end of May 2016. The debt increased to GHC106.2billion by July 2016 representing 66 per cent of GDP.

Ghana’s development partners have expressed concerns about Ghana’s worsening debt situation as well as government’s spending spree.

According to them, failure to check government’s borrowing appetite and expenditure could lead to a recurrence of the fiscal slippages experienced during the 2012 elections.

The Institute of Statistical, Social and Economic Research (ISSER) has criticised government‘s debt strategy of increasing borrowing on the private capital market, saying the strategy is counterproductive, especially when its management of and spending of borrowed funds is fraught with inefficiencies.

The Institute in its ‘State of the Ghanaian Economy in 2015’ said “Ghana must start to curb the relentless rise of debt; one thing is certain: the longer managers of the economy delay in reckoning with Ghana’s macro-economic problems, the more severe the eventual consequences will be.”

“There is no doubt that a debt crisis looms if corrective measures such as cutting and realigning expenditures are not prioritized; the plain truth with respect to improving the country’s debt position is the need to cut back on spending,” ISSER said in its position on the country’s debt.