Institute of Fiscal Studies, (IFS) has projected that Ghana’s public debt could hit a record level of GH₵150 billion before the end of 2018.
According to the Executive Director of IFS, Professor Newman Kusi, the government’s recent indication to issue bonds and other project financing mechanisms would increase the debt ratio to an uncontrolled state.
“The whole public debt was GH₵138.6 billion, that is even as at September if you add the ESLA bond and you add the bod that we issued in November, and then you add the GH₵10 billion that government now plans to borrow, it would take us somewhere more than GH₵150 billion.”
He spoke at JoyBusiness on the sidelines of a roundtable discussion on implications of the country’s debt on the economy.
He explained why the end of year debt for 2017 is around GH₵146.2 billion, a situation he thinks was unnecessary because some of the projects were unprofitable.
According to the Institute of Fiscal Studies, IFS the country’s public debt has been hitting the over 70 percent of the Gross Domestic Product, GDP for more than five years.
In his presentation, Professor Newman Kusi said even though applauded efforts by the current government in reducing the debt, he fears Ghana is not winning the war against debt stability.
He thinks government can overturn the situation through the introduction of innovative ways in mobilizing revenue domestically.
“The way forward is…to try to strongly enhance domestic mobilization,” Prof. Newman said.
The implication of the huge debt ratio on the economy has been a worry to many analysts and some donor partners.
The World Bank recently warned the government to manage its debt ratio in order not to return to a highly indebted status.
The roundtable discussion is aimed at assembling financial experts to propose ways of dealing with the country’s rising public debt which is having a negative impact on the nation’s development.
It was on the theme: “Ghana’s growing Public Debt- Implications for the Economy.”