The Minister for Finance, Ken Ofori-Atta, has indicated on the floor of Parliament that the gross public debt stock in nominal terms stood at GH¢154 billion as at end of May 2018, representing 63.8 percent of Gross Domestic Product (GDP) as compared to 66.8 percent in the same period of 2017.
Presenting the Mid-Year Fiscal Review for 2018 at the plenary, he emphasised that the external debt at end of May, 2018, amounted to GH¢81.7 billion whilst domestic debt amounted to GH¢72.6 billion representing, 53.0 percent and 47.0 percent of the total public debt stock, respectively.
Mr Ofori-Atta explained that expenses on the use of Goods and Services, amounting to GH¢1.627 billion was about 9.0 percent higher than the programmed target.
“The slippage is mainly attributed to front-loaded expenditures including those for the purchase of fertilizer for the Planting for Food and Jobs programme. These overruns are not expected to recur in the second half of the year”, he revealed.
On Overall Balance and the government’s Financing Operations, the Finance Minister pointed out that the resulting cash fiscal deficit amounted to GH¢6.371billion against a programmed target of GH¢5.739 billion.
He added that the deficit for the period was financed mainly by using inflows from foreign sources including receipts from the 2018 Eurobond.
On Eurobond Issuance, Mr Ofori-Atta informed the house that the government raised a total amount of US$2 billion in a 10 year and a 30 year Eurobonds of US$1 billion each from the international capital market.
Mr Ofori-Atta further reiterated that the Medium Term Debt Management Strategy (MTDS) has been prepared and published in accordance with the Public Financial Management Act, 2016 (Act 921) and in line with the macro-fiscal framework for the period spanning 2018-2021.
He added that “the strategy envisages an increase in the issuance of medium-to-long-term bonds in the domestic bond market over the strategy period.
“This is aimed at diversifying the instrument base and providing suitable options with which institutions like the pension and insurance companies can match their assets to their liabilities”, he stated.
Mr Ofori-Atta ended that the strategy also envisions the issuance of a sovereign bond with proceeds used for liability management and budget expenditure.
Source: GhanaJustice/S.Ayisi
