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The Minister for Finance, Ken Ofori-Atta says more than half of Ghana\u2019s total revenues and more than 70 percent of the nation\u2019s tax revenues are used in servicing debts incurred by the State.<\/p>\n
Speaking at the launch of Ghana\u2019s Domestic Debt Exchange Programme on Monday, December 5, 2022, the Finance Minister said Ghana\u2019s debt sustainability analysis indicated that the country\u2019s debt is unsustainable.<\/p>\n
\u201cThe Debt Sustainability Analysis (DSA) demonstrated unequivocally that Ghana\u2019s public debt is unsustainable, and that the government may not be able to fully service its debt down the road if no action is taken. Indeed, debt servicing is now absorbing more than half of total government revenues and almost 70% of tax revenues, while our total public debt stock, including that of State-Owned Enterprises and all, exceeds 100% of our GDP. This is why we are today announcing the debt exchange which will help in restoring our capacity to service debt.\u201d<\/p>\n
The Minister said the reasons for the unbridled ballooning of the State\u2019s debt included the \u201cCovid-19 pandemic, rising global food prices, rising crude oil & energy prices; and the Russia-Ukraine war adversely affected Ghana\u2019s macroeconomy, with spillovers to the financial sector.\u201d<\/p>\n
\u201cThe combination of adverse external shocks have exposed Ghana to a surge in inflation, a large exchange rate depreciation and stress on the financing of the budget, which taken together have put our public debt on an unsustainable path,\u201d the Minister added.<\/p>\n
Mr. Ofori-Atta had earlier said that the country\u2019s total debt stock shot up to GH\u00a2450 billion in 2022 from a total of GH\u00a2120 billion in 2017.<\/p>\n
Ghana is currently seeking bailout support from the International Monetary Fund.<\/p>\n
While the country has put a freeze on public-sector employment, it has also announced a debt restructuring programme to reduce the country\u2019s debt burden.<\/p>\n
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