Govt adds 12 billion cedis to the country’s debts

It appears efforts by government to reduce the country’s rising debts are not yielding the needed results.

This is because latest figures from the Bank of Ghana shows that the country’s public debt continuous to rise.

The country’s debt stood at 88.2 billion cedis as at March this year, 12 billion cedis more than the 76 billion cedis recorded in December 2014.

However, in relation to the debt’s stock share of the total value of Ghana’s GDP, it has reduced to about 65 from 67 percent.

The development might come across as good news, especially for those who were worried that Ghana was inching closer to the dreaded 70 percent mark which could have put Ghana on the HIPC status.

Ghana’s economy is now worth 112 billion Ghana cedis, while the public debt stock stands at 88.2 billion cedis.

But Economist Sampson Aglikor tells Joy Business the numbers show that government needs to take a second look at programs aimed at checking its rising expenditure.

He called on government to be “radical” in its approach in order not to entangle itself in debt.

“Our debt sustainability framework must be very, very robust now and the monitory system must be key to ensure that we don’t find ourselves in a situation that creates a bigger challenge for the economy.”

Sampson Aglikor explained further what could be done to control the situation: “The debt refinancing strategy and also the expenditure expectation must be aggressively worked on. We should not, unfortunately, expect expenditure increases across a broad spectrum including wages and salaries, any marginal increases in that segment of government expenditure adds significant amount to the debt.”

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