Ghana added GH¢730 million fresh loans to public debt stock in December 2021
Ghana’s economy downgraded by credit rating agencies
A former deputy finance minister, Dr. Cassiel Ato Forson has provided "new figures" for the country’s public debt stock for the period ending December 31, 2021.
The development comes after the Bank of Ghana, in its March 2022 Summary of Economic and Financial Data said the debt stock reached GH¢351.8 billion in December 2021 which is equivalent to about 80.1 percent of GDP.
But the Ranking Member on Parliament’s Finance Committee, Dr Cassiel Ato Forson claims that the country’s public debt stock had reached GH¢362 billion for the period representing about 83 percent of Gross Domestic Product ratio.
In a tweet posted on March 19, 2022, the lawmaker said the Bank of Ghana had excluded key components from its data which accumulated the public debt stock for the period ending December 2021.
“For Your Information, the actual public debt as at 31st December 2021 is about GH¢362 billion (83% of GDP). The GH¢362 billion (80.1% of GDP) put out by the Bank of Ghana excludes: 1. ESLA (GH¢9.5 billion) 2. GETFund Bond (GH¢2.4 billion) 3. Sinohydro (GH¢750 million) Stagflation plus acute debt overhang,” the lawmaker wrote.
“Deep trouble sadly, the borrowing continues unabated!” Ato Forson added.
FYI, The actual public debt as at 31st Dec. 2021 is about 362bn( 83% of GDP)!
The 351.8bn(80.1% of GDP) put out by the BOG excludes:
Meanwhile, the World Bank had earlier projected that Ghana’s debt stock may have exceeded the 80 percent mark.
Country Director for the Bank, Pierre Laporte earlier speaking at a public lecture on March 7, 2022, said Ghana’s public debt situation might have changed due to increased government borrowing.
“The data as we know is close to 80% of GDP. Probably, now as we speak, it might have exceeded” he stated.
“The fiscal deficit [9.7% in December 2021], unfortunately, with COVID-19 needs to be urgently brought down. Inflation must also be brought down. This is an interesting discussion, and we must acknowledge the situation on the ground,” Laporte earlier said.
However, recent figures by the Bank of Ghana further revealed the country added about GH¢730 million in fresh loans to the total public debt stock in December 2021.
Per the figures, the increase can partially be attributed to the depreciation of the cedi in the last two months of 2021 – a move that has further increased the external debt component.
The Bank of Ghana, touching on the external component of Ghana's total public debt, said the figure increased in December 2021 to US$28.3 billion (GH¢170.0 billion) from US$27.9 billion in November 2021.
This, in terms of the debt-to-GDP ratio, was equivalent to 38.7 percent.
On the domestic debt front, the Bank of Ghana's figures showed a rise to GH¢181.8 billion in December 2021 from an earlier GH¢179.4 billion recorded in November 2021.
This was however equivalent to 41.4 percent of Gross Domestic Product.
The latest figures by the Bank of Ghana could force government to stick to more homegrown solutions by borrowing from the domestic market due to high-interest costs on the external market.
Ranking Member on Parliament’s Finance Committee, Dr. Cassiel Ato Forson