Gov’t plans to restructure domestic debt
Adnan Adams Mohammed
The government plans to restructure its domestic debt component of the total public debt of GH¢351.8 billion, which is 80.1 percent of Gross Domestic Product (GDP), at the end of December 2021.
Figures from the Bank of Ghana indicates that, the domestic debt stood at GH¢181.8 billion as at December 2021, equivalent to 41.4 of GDP, while the external component of the total public debt shot up to US$28.3 billion or GH¢170.0 billion.
The Finance Minister speaking to a gathering in Accra, last week, to announce government’s support and programmes for the upcoming 2022 Annual Meetings of the African Development Bank to be held in Accra later this month, posited that, the issue of restructuring Ghana’s debt was a complicated one, especially the Eurobond and the private sector loans.
“The issue of restructuring debt is a very complicated issue especially with the private sector and the Eurobond etc. We need to decide among ourselves on what type of structure that will be useful to us. We have essentially about 50/50 with regards to domestic and external debt”, Ken Ofori-Atta expressed.
“The domestic debt of course has interest rates of about three and half times what the foreign debt has. And then we look at the profile and clearly the foreign debt in terms of the impact really begins to hit in 2025 with regards to our Eurobonds etc.”
To him, solving the domestic debt conundrum should be tackled immediately.
“So solving the domestic debt conundrum is what we should be looking at and that is where we are putting our minds as to how best to do that”.
On the rising inflation Mr. Ofori-Atta pointed out that though the situation is a global one, government is committed to building an entrepreneurial society to trade among themselves and reduce imported inflation.