Ghana's debt to hit GHC130 bil by end of 2015

quist

August 14, 2015 1:45 PM

The debt trajectory for the second half of the year, which includes the floating of more domestic bonds treasury bills, and other long term government instruments, will all ensure that government's debt hit GHC50 billion

Finance Minister, Seth Terkper

Government has already accrued over GHC25 billion in the first half of the year and is set to borrow GHC25 billion more in the second half of the year. The minister of finance, Seth Tekper says the money will be used to service increasing interests of previous debts and planned infrastructure development.

The finance minister, on Wednesday August 13, announced government's decision to float a five-year domestic bond to raise GHC500 million in the month of August.

Experts have cautioned government against the excessive borrowing as the current debt trajectory will see government borrow more that GHC50 billion by the end of 2015. This will then escalate Ghana's total debt, which many have described as dire, from the current GHC90 billion to over GHC130 billion by the end of 2015.

August is set to be the month in which government will borrow the most aggregation of all the loans and instruments reveal that government will borrow over GHC5.5 billion in August alone. This includes the GHC500 million 5-year domestic bonds, the $1.8 coca syndicated loan and the $1.5 billion Eurobond.

Government's borrowing from the domestic money market is crowding out local businesses on the local money market since banks find it a more frugal enterprise to lend to government instead of local businesses. In a press briefing with the press, the minister of finance charged local banks to diversify their portfolios with both short term and long term government instruments.

quist