Ghana has Her Debt Hitting GH¢467.4bn

by Isaac Mintah
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The Central Bank of Ghana (BoG) has said the country’s public debt stock was GH¢467.4 billion as at September 2022.

Ghana has her debt totalling 75.9% of the country’s GDP compared to 76.6% thus GH¢351.8 billion at December last year.

The Governor of BoG has spelt out the facts at a  press briefing organized by the Monetary Policy Committee yesterday.
Dr. Ernest Addison said that out of the total debt stock and  domestic debt was GH¢195.7 billion. The external debt was also GH¢271.7 billion (39.9 per cent of GDP).

Ghana

Dr Ernest Addison

He added that the external sector developments showed mixed trends in the prices of main export commodities in Ghana.

Dr Ernest also said Brent crude prices eased from the highs of over US$100 per barrel to US$93.6 per barrel in October 2022, recording a year-to-date growth of 25.1%.

The recent decline in crude prices mainly reflects global recession fears amid weakened growth momentum in China. Gold prices trended downwards to US$1,666.7 per fine ounce in October 2022, representing a drop of 6.9%, on the back of a strong US dollar and rising interest rates, he hinted.

Adding up, he revealed cocoa prices settled at an average price of US$2,337.71 per tonne in October, down by 5.8% year-to-date. The data owed to expectations of a large crop and mixed grinding data.

Dr Addison further explained that provisional data on the balance of payments show that the current account deficit has deteriorated. The decline begun  from 2.4% of GDP (US$1,860.3 million) in September 2021 to 2.8% of GDP (US$1,831.6 million) in September 2022.

He stated that higher deficit was on account of higher payment outflows in the services and income accounts. This goes ahead to offset the significant improvement in the trade surplus recorded over the period.

The capital and financial account recorded significant outflows amounting to US$1,486.0 million during the review period, compared with inflows of US$3,491.0 million a year earlier, he said.

The outflows were as a result of portfolio reversals, reduced FDI inflows, lower private capital inflows, and higher build-up of deposit taking corporations’ foreign assets.

He said the current deficit, with outflows in the capital and financial accounts, resulted in a balance of payments deficit of US$3,410.0 million. Comparing with a balance of payments surplus of US$510.0 million in December 2021.

He observed the interbank weighted average rate increased to 23.98 per cent in October 2022 from 12.66% in October 2021. This is consistent with the increases in the policy rate. It also agrees with the increments in the Cash Reserve Ratio from 12% in August 2022 to 14% in October.

Dr Ernest added that the average lending rates of banks rose to 31.40% in October 2022 from 20.34% in 2021. The data on the fiscal operations for January to September 2022 resulted in an overall budget deficit as GH¢41.7 billion against a programmed deficit target of GH¢36.7 billion.

He emphasized the primary balance was a deficit of 1.6% of GDP, against a deficit target of 1.0% of GDP. The higher-than-projected deficit was on account of revenue shortfalls alongside expenditure overruns.

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He also hinted that total revenue and grants amounted to GH¢65.4 billion compared with a target of GH¢67.3 billion. This represented a shortfall of 2.8 % compared to target and year-on-year growth of 33.2%.

Dr Addison finalised;

Total expenditure (including arrears clearance and discrepancy) for the period amounted to GH¢109.4 billion (18.5% of GDP), above the target of GH¢103.99 billion (17.6% of GDP) by 5.2%.

He pointed that the resulting overall fiscal deficit of GH¢41.7 billion was financed mainly from domestic sources.

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