Ghana’s ballooning debt stock amid COVID-19 ‘justifiable’

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A Deputy Minister for Finance, Kwaku Kwarteng, has dismissed claims by the Minority, suggesting that the Akufo-Addo administration has borrowed recklessly, ballooning Ghana’s public debt.

According to him, government’s debt management strategy has proved effective in retiring legacy debt, cleaning up the financial sector mess and setting the country back on the path of progress.

The Finance Minister, Ken Ofori-Atta on Wednesday, October 28, 2020, made a request for the approval of GHS27.4 billion in Parliament to fund expenditure for the first quarter of 2021.

Speaking to Citi News, the Obuasi West MP justified Ghana’s current debt status amidst the COVID-19 pandemic.

“We have had to incur our debts because of COVID-19 and therefore if you look at the global average, different situations will call for different considerations. So we want to do below 70 but when you have COVID-19 to deal with. When you have a financial sector situation to deal with and you have legacy debt, you may have to incur some debt before you stabilize the economy,” he explained.

Ghana’s debt stock rises to GHS263.1 billion

The total public debt stock which was GHS219.6 billion at the beginning of the year, saw an accumulation of GHS43.5 billion within seven months, according to the latest Summary of Macroeconomic and Financial Data from the Bank of Ghana.

This brought the total debt at the end of July 2020 to GHS263.1 billion.

The total amount of fresh debt accumulated in the first seven months of the years 2016, 2017, 2018 and 2019 stood at GHs8.7 billion, GHS11 billion, GHS21.8 billion, and GHS28.9 billion respectively.

In the first seven months of 2020 however, the amount of new debt accumulated jumped to GHS43.5 billion, representing an increase of 19.8 percent in the country’s debt stock from January to July.

This compares to an increase of 16.4 percent in the country’s total debt stock in the same period in the year 2019.

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