Accra, Ghana’s debt to Gross Domestic Product (GDP) ratio has declined from 73 per cent at the end of December 2016 to 68.3 per cent at September 2017.
This is the first time since 2006 that the country has recorded a year-on-year reduction in the debt to GDP ratio.
This was revealed by Mr Ken Ofori-Atta, the Minister of Finance, in his 2018 Budget Statement to Parliament on Wednesday.
According to him, the reduction in the debt to GDP ratio was a result of government’s prudent management of the economy, reduction in the fiscal deficit and a policy of debt re-profiling.
The reduction in the debt stock has also led to a reduction in the interest burden of Ghana’s debt, with interest payments dropping 45 per cent of tax revenue to 43.8 per cent in September 2017, and a projected 41.9 per cent reduction by the end of 2017.
He stated that Ghana’s ballooning debt stock was one of the challenging economic situations that the Akufo-Addo led Government inherited; a situation which placed an undue burden on the 2017 Budget.
Ghana’s debt to GDP ratio increased from 32 per cent in 2008 to 73 per cent by the end of 2016, resulting in an increasing interest burden; with interest payments alone consuming 45 per cent of tax revenue and 6.8 per cent of GDP in 2016.
It is important to note that the annual average rate of debt accumulation of 36 per cent over the last four (4) years has declined over the last nine (9) months to about 13.58 per cent. This is the lowest annual increase in the public debt over the last decade, he noted.
He reiterated government’s commitment to keeping the public debt in check and moving away from the ‘unbridled borrow and spend culture’ of the previous eight years in order to further improve the debt outlook and debt sustainability for Ghana.
Source: Ghana News Agency