Ghana’s debt stock has increased due to Covid-19, other factors-Minister
Finance Minister Ken Ofori-Atta has justified why Ghana’s debt stock has increased to 77.1% as of June 2021.
The Minister explained that the increase in the debt stock was mainly because of the Eurobond issuance in April 2021, COVID-19 pandemic effect, contingent liabilities, and front-loading of financing to meet cash flow requirements for the first half of the year.
He disclosed this when he presented the 2021 mid-year budget review on Thursday, July 29, 2021.
He said the total public debt stock, as a percentage of GDP, increased from 76.1 percent at the end of December 2020 to 77.1 percent of GDP at the end of June 2021.
This stock includes the financial and energy sector bailouts. Excluding the Financial Sector Bailout, the nominal debt stock as percentage of GDP is 72.9 percent, he added.
Data released by the Bank of Ghana reveals that the debt stock which ended the first quarter of 2021 at GH¢ 304.6 billion, increased by almost GH¢ 30 billion in April and May.
This saw Ghana’s total public debt as of the end of May 2021 rising to GH¢ 332.4.
The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.6% as of the end of May.
A breakdown of the debt numbers shows that the component of the debt secured outside the country after remaining relatively stable in the first quarter rose significantly by about GH¢ 20 billion from GH¢ 141 billion at the end of March 2021 to GH¢ 161.5 billion at the end of May this year.
The external debt component as of the end of May 2021 made up 37.2% of the total value of the economy, which is projected to be about GH¢ 434 billion for 2021.
The domestic debt rose by about GH¢ 7 billion, bringing total domestic debt to GH¢ 170.8 billion at the end of May this year from the GH¢163.6 billion recorded at the end of March this year.
The new figure represents 39.4% of the projected GDP for 2021.
The domestic component of the total public debt contains the financial sector resolution bond, which was GH¢ 15.2 billion at the end of May 2021.