Ghana’s public debt now GH¢89.5bn

• Posted on July 16, 2015July 16, 2015
• by Nana Kwesi Coomson
• Comment

Ghana’s total public debt stock reached GH¢89.5 billion at the end of May 2015, representing 67 percent of Gross Domestic Product (GDP) up from GH¢88.2 billion at the end of April 2015, representing 65.3 percent of GDP.

Per the aforementioned figures, the country incurred a debt of GH¢1.3 billion within a period of one month from April to May 2015.

Out of the total debt stock, debt incurred internally was GH¢35.7 billion, representing 27.7 percent of GDP, while the external debt stock stood at $53.8 billion, representing 40.4 percent of GDP.

Government inherited a debt stock of GH¢9 billion in 2008 but has increased it to almost GH¢90 billion.

Policy Rate Maintained

Dr. Kofi Wampah, Governor of the Bank of Ghana (BoG), who briefed the press at the close of a Monetary Policy Committee (MPC) meeting in Accra yesterday, said the committee decided to maintain the policy rate at 22 percent.

The policy rate, he noted, was maintained to contain inflationary pressures, stating that the Committee would continue to monitor developments in the country’s economy and take appropriate action.

“Though inflation and inflation expectations were still elevated, the pressures in the outlook for the medium-term were waning.

“This is as a result of the tight monetary policy stance, continuing fiscal consolidation and the recent recovery of the cedi,” Dr. Wampah said.

He said the tight monetary policy stance had contributed to the improved inflationary outlook.

Additional Measures

To also streamline monetary operations, the Governor said his outfit would introduce additional measures to enhance transparency in monetary operations and improve the transmission mechanism.

He said the monetary policy would be merged with the reverse repo rate within 30 days, stating that the merger of the rate would be immediately followed by the introduction of a 7-day reverse repo instrument in the money market to offer more flexibility in the liquidity management of banks.

“In order to improve liquidity in the foreign exchange market, the Bank of Ghana and the Ministry of Finance have agreed to open the 2-year Note to non-resident participation. The modalities for this are currently being worked on,” Dr. Wampah added.

He said the Bank of Ghana would engage the banks before the implementation of the new measures.

By Cephas Larbi