International Monetary Fund (IMF)
The International Monetary Fund (IMF) says Ghana will end the year without making significant progress in reducing its debt-to-GDP ratio.
This is according to IMF’s Fiscal Monitor report released on the sidelines of the annual Spring Meetings in Washington DC.
Government was hoping to end the year with a debt-to-GDP of about 70 percent based on some new debt management strategies it plans introducing.
But the IMF, in its latest fiscal report, is forecasting 71.7 percent end of year for Ghana this year, which is slightly lower than the 72.4 percent recorded for 2016.
Concerns by Analysts
The development has raised concerns among some analysts who fear that the new strategies government is implementing may not be enough to reduce the public debt significantly.
The country’s debt stock, as a percentage of the total value of the economy over the years, has been a concern for the country’s development partners, donors, and rating agencies because of its impact government expenditure, the cost of credit, economic growth.
According to the 2017 budget, government is planning to spend a little over GH¢10 billion cedis as interest payment for loans.
Ghana was recently classified as high risk of debt distress by the IMF, because of the country rising debt stock, which reached GH¢122 billion as at December 2016.
A development that could increase Ghana’s cost of borrowing on the international market.
However, some are even describing the December debt stock of GH¢122 billion as provisional because of news that the current administration is carrying out an audit on some expenditure by the previous administration, which was not reported or captured under the GIFMIS project.