Ghana’s public debt has hit GH¢ 122.3billion representing 72.5% of GDP at the end of February 2017, according to the Bank of Ghana’s Summary of Economic and Financial Data released over the weekend.
The new figure is GH¢ 22billion higher than what was recorded in February 2016 which was GH¢ 100.2billion which was 72.2% of GDP.
According to the BOG’s data, of the GH¢ 122.3billion public debt, GH¢ 53.4 billion was domestic being facilities or loans secured from the country while GH¢ 68.9billion was from external borrowing.
In terms of percentage to GDP domestic borrowings represented 31.6% while the external debts to GDP was 40.8%.
Comparing the current figures to the same period in 2016 (February), Ghana recorded external debt of GH¢ 59.9billion which was 43.2% of GDP while domestic borrow for the same period was GH¢ 40.3billion representing 29.0% of GDP.
Even though the government has promised to reduce the Debt to GDP ratio to about 71 percent of GDP, the current GH¢ 122.3billion representing 72.5% of GDP, according to the International Monetary Funds (IMF), still puts Ghana among the high – risk distress debt country.
This means Ghana may have challenges in payments of its debts on time.
Meanwhile the Monetary Policy Committee of the Central Bank of Ghana (BoG) is widely expected to loosen its tight monetary stance, after inflation trended downwards for the fifth consecutive time and the local currency maintained a steady performance against the US dollar.
Inflation, has since October last year, fallen consistently from 15.8 percent to 13.2 percent as at last month and is further projected to continue its downward trend after petroleum prices fell marginally, following the scrapping of some taxes in the price build-up.
The petroleum prices, which provide principal inflationary pressures, are expected to fall further in the next pricing window as the local currency, which had depreciated 8.6 percent as at March 10, recovered from its decline to record a year-to-date depreciation of 4.8 percent.