Debt profiling to avert weekly GHC1bn burden – Deputy Finance Minister
The Deputy Minister of Finance, Charles Adu Boahen has revealed that the government’s debt management plan will save the country the burden of seeking one billion cedis every week to repay its debts.
According to him, the relatively high interests on short term debts estimated over 20 billion cedis, has made it difficult to repay.
The short term instruments which are in 90, 120 and 180 days, Treasury bills also culminate into a weekly repayment amount of between 800 million to 1 billion cedis.
A development Mr. Adu Boahen believes requires pragmatic measures to address.
“Every week we will have to scramble to find a billion cedis to pay off the short term debts or refinance it meaning we will have to get investors to roll over and not all of them would want to roll over,” he said on the Citi Breakfast Show on Tuesday.
At present, Ghana’s total debt comprises of between 38 to 40 percent short term, 30 percent medium term with the rest being long term.
The Deputy Finance Minister also explains that the debt re-profiling has become necessary as government is challenged with a weekly 250 million cedis amount to finance the estimated 12 billion cedis budget deficit anticipated this year.
In his view, the increased obligation on the government translating into 1.25 billion cedis “puts a strain on the debt management and economy to constantly find money to meet expenditure.”
The latest financial and economic data by the Bank of Ghana showed that the country’s debt has hit 29.2 billion dollars or 122.3 billion cedis as at December 2016.
This also represented 72.5 percent of the country’s Gross Domestic Product for the period.
The comments by Charles Adu Boahen come on the back of concerns by some industry watchers that the NPP government is adding unto the country’s debt stock with the 2.25 billion dollars it raised from the four bonds issued last month.
But the government’s economic management team has since justified the plan.
For instance, Vice President and the Head of the economic management team, Dr. Mahamudu Bawumia believes the plan will accelerate plans to maintaining fiscal stability.