Government has been urged once again to seek for financial support from the International Monetary Fund and the World Bank to support the economic recovery from Covid-19.
According to the Head of Finance at Valley View University, Dr Williams Peprah, funding from the Bretton Wood institution is cheaper and will help stabilize the economy.
Making this statement head of the budget review which will be held this Thursday 27th July, 2021, Dr. Preprah said interest cost will also go down if the country seeks for funding from the multilateral institutions, rather than borrowing from the commercial market.
“It’s a major concern for every government how they measure their debt. What I noticed when the budget was read was that government was trying to make sure that it has a good balance of the debt; 50% from domestic market and 50% from external.
“When government is successful in doing that, sometimes it’s good for the country. From the last monetary policy report by the Bank of Ghana, we’re noticed that debt was gradually increasing and that is a major threat to our economy”, he pointed out.
“What I have been advising is to go to IMF and World Bank for some funds. In that case, it becomes a cheaper source of funds. Our interest rate will not increase, our reserves will rather be boosted because of high exports as well as a stabilize economy,” he said.
Ghana’s debt up significantly by ¢27.8bn to ¢332.4bn
Ghana’s public debt stock shot up by ¢27.8 billion in April 2021 and May 2021 to ¢332.4 billion, according to the Bank of Ghana.
This is equivalent to $57.9 billion, about 76.66% of Gross Domestic Product.
In March 2021, the total debt stock stood at ¢304.6 billion, and the significant increase in the debt stock was due to the $3 billion Eurobond raised in March 2021 as well as the huge borrowing on the domestic market.