55% of Ghana’s tax revenue is used to pay interests on loans according to the Finance Minister

May 10, 2019 8:26 PM

Ghana’s Finance Minister Ken Ofori-Atta has disclosed that 55 percent of Ghana’s tax revenue is used to settle interests on loans, alone.

Ken Ofori-Atta

Mr Ofori-Atta at a forum said that in 2018, for instance, Ghana “raised GHS37.8 billion in tax revenues and spent GHS21.1 billion to service our loans – and by that, I mean, interest payments alone.”

According to the Minister, The less revenue Ghana generates, “the more we will have to spend because arrears and interests accrue and our maintenance culture suffers”.

A Summary of Economic and Financial Data released by the Bank of Ghana in the first quarter of 2019 indicated that Ghana’s debt stock increased by 21.5 percent as of the end of 2018. This means that Ghana added GHC30.6 billion to the GHC142.6 billion debt of 2017.

Ghana’s debt stock, therefore, hit GHC173.2 billion.

The country’s external debt at the end of 2018 stood at GHC86.3 billion.

The domestic component of the total debt stock was GHC86.9 billion.

The two represent 28.9 percent and 29.1 percent of GDP, respectively.