IMF, Fitch caution Ghana over ¢139bn plus rising public debt

Ghana’s public debt under President Nana Addo Dankwa Akufo-Addo has reached ¢139 billion as at the end of June this 2017, data released by the Central Bank has shown.

The latest economic and financial report released by Bank of Ghana (BoG) revealed the country’s debt stock rose geometrically by ¢1.4 billion between May and June.

The data showed the amount of ¢74.6 billion formed part of loans secured outside the country by the current government.

About ¢64 billion was also borrowed locally.

The Central Bank’s data pegged Ghana’s debt-to-GDP ratio at 68.6 percent, a little below the 70 percent mark which is the no-go zone.

The International Monetary Fund (IMF) has deplored Ghana’s rising debts, a development it said could derail efforts to stabilise the economy.

The Bretton Woods institution said the country’s debts has reached the level that it will find it difficult to settle its international debts.

International rating agency, Fitch has also cautioned Ghana’s rising debt could lead to the country’s credit worthiness being downgraded.

It is not clear what could have led to the rise in the debt stock, but some financial experts believe fresh borrowing by government and marginal depreciation of the cedis could be blamed for that.

However, the government has observed it is putting a ceiling on public debt through measures that will reduce it to an appreciable level.

It cited its debt profiling strategy and the lengthening of the yield curve in sourcing long-term to finance short-term debts as some of the measures it has put in place.

 

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *