Haruna Iddrisu, Minority Leader
Ghana’s debt stock has increased significantly over the last couple of years with serious implications for effective fiscal management. Total public debt stood at GH₵122.6 billion by the end December, 2016. By September 2017, the debt stock had reached GH¢138.9 billion. Adding the ESLA Plc. GH₵4.7 billion bond issued in late October and sale of GH₵5.3 billion long-term bonds at the end of November 2017, of which nearly half consisted of fresh borrowing and the other half treasury bills that were restructured into long-term bonds, brought the total public debt to about GH₵146.2 billion, or 71.7% of GDP at end-November 2017 very close to the 73.3% of GDP that the NDC government was bastardised for in 2016.
This made the public debt to increase by about GH₵23.6 billion in the first nine months of 2017. The Npp government also plans to borrow GH₵10.9 billion to finance the projected 2018 deficit of 4.5% of GDP, which will raise the public debt/GDP ratio further if none of the maturing debt is paid during the year, with serious consequences for government interest payment obligations.
External debt has constituted a large portion of Ghana’s total public debt since 2014. By 2016, our external debt reached US$16.5 billion, indicating an increase of US$7.3 billion or 79.3% in three years. By September 2017, Ghana’s total external debt had reached US$17.2 billion, implying an increase of US$700 million or 4.2% in nine months.
As of March 2018, the Npp government has borrowed to the tune of about GHC36billion thus increasing our total public debt stock to nearly GHC158billion with practically nothing to show for such atrocious borrowing except a partially and a poorly implemented scholarship policy called the free SHS policy.
On Friday, 23rd March 2018, the Npp government submitted and sought parliamentary approval for the issuance of a sovereign bond and Global depository Bonds totaling US$2.5billion. Additionally, the Npp government submitted and sought parliamentary approval to borrow GHC500million to supposedly refinance expensive domestic cedi denominated debt. It all happened in 1 day!
Below is a tabular representation of the Npp government’s borrowing over the past 12months:
GOVERNMENT BORROWING FROM FEBRUARY 2017-MARCH 2018
DATE
PURPOSE OF LOAN
AMOUNT
1.July 2017
Accra Sanitation livelihood improvement project
US$48.85m
8.Oct 2017
IDA/World Bank to fund sustainable rural water and sanitation
US$45.7m
4.Nov 2017
IDA/World bank
US$40.m
5.Nov 2017
Unicredit bank, Australia
Euros8.00 (US$11m)
6.Nov 2017
Exim bank, India
US$ 150m
7.Nov 2017
ING Bank, Belgium
Euros25m (US$35m)
2.Dec 2017
IDA/World bank
US$ 200m
3.Dec 2017
ICBC-China
US$ 88.13m
9.Feb 2018
AfDF – SAPIP project
US$ 39.01m
10. March 2018
Deposit Finance Authority
Euros 14m (US$22m)
TOTAL
US$679.69m
BONDS
DESCRIPTION
AMOUNT
1.April 2017
ESLA (Ken Bond)
US$ 2.25b
2.Oct. 2017
ESLA Plc Bond
Gh₵4.7b
(US$ 1.01b)
3.Nov. 2017
Long Term Bonds
Gh₵5.3b
(US$ 1.3b)
4.April 2018
Sovereign Bond (to finance 2018 Budget)
US$ 1.0b
5.April 2018
Global Depository Bond (Finance maturing loans)
US$ 1.5b
6.April 2018
Bond (Finance Domestic Loans)
Gh₵0.5b.
(US$120m)
TOTAL DEBT US$ 7.859B
Minority in Parliament
Monday, 26th March 2018.