A summary of Economic and Financial data from the Bank of Ghana (BoG) has revealed that Ghana’s total public debt stock has increased to GH¢127.
1billion ($29.4billion) as at the end of the first quarter of 2017.
This represents 62.5% of projected GH¢203.4 billion Gross Domestic Products (GDP) for 2017.
Total public debt up by GH¢4.5bn
This means that GH¢4.5 billion was added to the total public debt stock in the first three months of 2017 as the debt stock was GH¢122.6billion at the end of 2016.
Interest cost and deficit financing to blame
Analysts explained that the increase in the public debt stock was the result of deficit financing and payment of inherited arrears and debts.
Government borrowed more than GH¢4.5 billion in the first quarter of 2017, but the debt stock did not go up to equal the amounted borrowed because part of the money borrowed was used to pay off part of the country’s debt.
GH¢27.3 as interest cost and deficit financing for 2017
Projected interest cost and deficit financing for 2017, amounts to GH¢27.3 billion.
Per the data from Bank of Ghana, out of the GH¢127.1 billion, external debts account for GH¢71.9 billion, representing 35.3% of GDP.
It also revealed that the domestic debt is GH¢55.2 billion representing 27.2% of GDP.
End of 2016 budget deficit was 9% but the new government projected to reduce it 6.5% by the end of this year.
The 6.5% projected budget deficit for 2017 represents GH¢13.2 billion as the difference between the government’s revenue expectations for 2017 compared to the expenditure targets for the period.
Government’s total revenue target for 2017 is estimated at GH¢44.9billion against a targeted expenditure of GH¢58.1 billion, representing 28.6% of GDP.
How the deficit is being financed
Government revealed that the deficit will be financed by domestic and international sources.
Net domestic financing will amount to GH¢14.6 billion, equivalent to 7.1% of GDP while foreign financing is expected to reach GH¢1.3 billion, representing 0.6% of GDP.
GH¢14.1 billion interest cost for 2017
The interest cost on Ghana’s debt has also increased and will amount to an estimated GH¢14.1 billion in 2017.
2016 GDP = GH¢167,315.5 million
2017 GDP Projection = GH¢203,410.5 million