Despite the public debt rising to GH¢214.9 billion as at November 2019, representing 62.1 percent of GDP, Vice President, Dr. Mahamudu Bawumia, says the rate of debt accumulation over the last three years is the lowest the country has achieved in a decade.

“The strong fiscal adjustment that has taken place and better debt management has meant that the rate of debt accumulation has slowed down considerably to the lowest in a decade.”

Between 2008 and 2012, Ghana’s debt stock increased by 267 percent. Between 2012-2016, the debt stock increased by 243 percent. But the increase between 2016 and 2019, is 79 percent. There is a big difference,” he told the audience at a town hall meeting in Kumasi, Ashanti Region.

According to him, the increase in Ghana’s debt-to-GDP ratio has remained fairly low, which is about 4 percentage points under the Akufo-Addo government, while the performance between 2008 to 2016 has moved beyond 19 percent.

“There is a fiscal discipline that is being implemented. When you look at the figures before 2017 and after that, there is a huge difference. The government of Akufo-Addo has kept its promise of lowering the rate of growth of debt accumulation that was taking place under the previous administration,” the Vice President said.

On the issue of interest payments, Dr. Bawumia said, “although in absolute terms, the interest payment on the debt has increased in the last two years, with better debt management interest as a percentage of GDP, has declined 6.9% in 2016 of GDP to 5.7 in 2019.”

“We are reducing the burden of interest payments on our budget…this is good economic management,” he added.

The World Bank recently cautioned Ghana against piling its external debt and exceeding the sustainability threshold.

According to the bank, Ghana is currently rated as a moderate to high-risk debt distressed country and so must tread cautiously.

Source: Citibusinessnews.com