55% of tax revenue services debt – Ofori-Atta

Ghana’s Finance Minister Mr Ken Ofori-Atta has said close to 55 percent of Ghana’s tax revenue is consumed by interests on loans, alone.

He said in 2018, Ghana “raised GHS37.8 billion in tax revenues and spent GHS21.1 billion to service our loans – and by that, I mean, interest payments alone.”

The less revenue the country generates, Mr Ofori-Atta noted, “the more we will have to spend because arrears and interests accrue and our maintenance culture suffers”.

Mr Ofori-Atta made this known at a Danquah Institute forum on the theme: ‘Bridging the gap between the formal and informal economy, the role of domestic revenue mobilisation in an era of Ghana Beyond Aid’, held at the College of Physicians and Surgeons on Friday, 10 May 2019.

The Bank of Ghana’s Summary of Economic and Financial Data released in the first quarter of 2019 showed that Ghana’s debt stock increased by 21.5 per cent as of the end of 2018, adding GHS30.6 billion to the GHS142.6 billion debt of 2017.

Ghana’s debt stock, therefore, hit GHS173.2 billion.

The country’s external debt at the end of 2018 stood at GHS86.3 billion.

The domestic component of the total debt stock was GHS86.9 billion.

The two represent 28.9 per cent and 29.1 per cent of GDP, respectively.