The recent $2 billion sovereign bond secured by the government won’t put pressure on Ghana’s debt stock, a deputy Information Minister, Kojo Oppong-Nkrumah, has said.
Speaking on Eyewitness News, he explained that Ghana now has better debt sustainability because of an improved productivity base.The bond was in two categories; 10 and 30-year bonds respectively. The 10-year bond raised $1 billion at an interest of 7.62 percent while the 30-year bond raised $1 billion at an interest rate of 8.62 percent.
He noted that in the Akufo-Addo administration has gradually reduced the country’s debt-to-GDP ratio, via the rate of debt accumulation, to 69.2 percent from in 73 percent in December 2016.
“Of course we cannot bring it, one year, to zero. We are going to have to bring it down gradually on a slope. By reducing that, that is why now, we have come down to 69.2 percent,” he said.
Key to this has been the reduced borrowing to finance the budget. In 2016, GHc 16 billion was borrowed to fund the budget, but the figure is not expected to exceed GHc 10 billion in 2018, Mr Oppong Nkrumah said.
“We notice therefore that as we bring that curve down, the GDP also goes up because we are investing the little resources into productive activities and not just consumption activities. Therefore, the debt sustainability measure shows that we are coming down. So yes, we are not out of the woods yet, but we are gradually coming out of it.”
On why the government went beyond its target of $750 million, Mr Oppong Nkrumah explained that the countries liabilities had not changed despite the increased haul.
“Indeed, as we engaged on the market, we decided to take only 750 of the new liability so even though you notice, that in terms of paper, it is 1 billion and 1 billion for the 10 years and the 30 years, in terms of new liabilities, we still stuck to the 750 that you are talking about. it is the 1.2 that will go for liability management operations.”
By: Delali Adogla-Bessa/citinewsroom.com/Ghana
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