The rate of debt accumulation has seen a significant decline from 47.4 percent in 2013 to 13.5 percent in November 2017.
According to the Finance Minister, Ken Ofori-Atta, the debt mix has changed from short term dominance to medium and long term while the cost of debt has reduced creating fiscal space for government.
He noted all these prudent management of the Ghanaian economy has resulted in “improving our ability to meet our debt service obligations.”
In 2017, short-term domestic debt financing was 18 percent compared with 38 percent in 2016 whilst long term domestic debt financing was 19 percent compared with 24 percent in 2016. Medium term domestic debt financing amounted to 63 percent in 2017 as against 38 percent in 206.
According to Mr. Ofori-Atta, there is renewed investor confidence evident by tightening of sovereign spreads since 2016, adding “investing in Ghana bonds is less risky today than the last two years.”
Head of Department of Finance at the University of Ghana Business School, Professor Godfred Bokpin commenting said the real economy has seen significant improvement but will take a while before it is translated into the micro-economy.
He however advised the government to pay more attention to the agriculture and the manufacturing sectors which have tendencies of creating significant jobs.
As at February 2018, the government had cleared GH¢600 million arrears.
The Finance Minister emphasized that “Our strategy going forward is to clear the validated stock of arrears in accordance with our 2018 Budget programme. We were current on transfers to Statutory Fund for 2017.”
On some projected macroeconomic indicators, the Finance Ministry projected 8.9 percent inflation and a budget deficit of 4.5 percent of GDP and a wage bill of 42 percent of tax revenue. We have cleared about GHs3 billion in arrears compared with GHs3.7 billion budgeted in 2017.