Government borrowed 12.1 billion cedis in the first three months of 2015.
According to figures from the Bank of Ghana, the country’s current total public sector debt stock stood at 88.2 billion cedis at the end of March 2015, representing 65.3 percent of GDP.
There is already a huge debate about how government’s continuous appetite for borrowing is not sustainable and is contribution to Ghana’s current economic woes.
Last year government borrowed 24.1 billion cedis.
Ghana’s total public debt stock by the close of 2014, stood at 76.1 billion up from the 51.9 billion cedis it recorded in 2013.
Speaking at a press briefing to update the media on the BoG’s policy rate, Governor of the Bank of Ghana Dr.Henry Kofi Wampah said, ” the total public sector debt stock stood at GH¢88.2 billion at the end of March 2015, representing 65.3 percent of GDP. Of the total public debt, domestic debt constituted 41.4 percent and external debt 58.6 per cent”.
At the end of 2014, domestic debt stood at 34.6 billion cedis while external debt stood at 13 billion dollars.
According to Dr. Wampah, Ghana’s debt levels will gradually reduce because of the targeted decline in future deficit and efforts to ensure sustained growth.
“Though the absolute number (debt) may not come down immediately, but then as the consolidation takes place the numbers (debt) will come down, especially the deficit GDP ratio. This year we expect a deficit of 7.5%, next year that deficit will go down to just around 6% then the following year to about 4 %. So that gradual decline in the deficit will help consolidation of the fiscal and therefore also will help reduce the debt. Meanwhile growth is also going up at least in 2016 and 2017, growth is expected to be around 6% and 9%”, he added.
Government is expected to originally borrow 25.4 billion cedis in the first half of the year from the domestic market.
This is twice the amount it did from the domestic market last year through bonds and treasury bills.
Government has also announced plans to issue a 1 billion dollar Eurobond before close of June this year.