News Guide Africa

Tag: Ghana's debt

  • GHC93.0bn added to public debt due cedi depreciation

    GHC93.0bn added to public debt due cedi depreciation

    By Elorm Desewu

    The free fall of the cedi from the beginning of this year has added some ¢93.8 billion to the public debt stock.

    This has affected government’s ability to effectively manage our debt, said the Finance Minster, Ken Ofori Atta.

    The provisional debt data as at end September 2022 shows a significant increase in Ghana’s public debt largely due to exogeneous factors.

    The end-September 2022 provisional figures indicate that total gross public debt stood at GH¢467,371.31 million or US$48,871.34 million, representing approximately 75.9 percent of Gross Domestic Product (GDP).

    The domestic debt component was GH¢195,657.60 million, which is 31.79 percent of GDP, whilst external debt is GH¢271,713.71 million, representing 44.15 percent of GDP. The increase in the domestic debt is largely on account of rising interest costs. Domestic debt as a share of total public debt reduced from 51.6 percent in 2021 to 41.9 percent as at end September 2022.

    The external debt as a percentage of the total debt stock is 58.1 percent as at end September 2022. The sharp growth in the external debt stock is largely driven by the depreciation of the local currency. The depreciation of the Ghana cedi added GH¢93,855.15 million to the external debt stock.

    Overall, debt accumulation increased from 20.7 percent in 2021 to 32.7 percent as at end September 2022, reflecting the impact of the depreciation of the Ghana cedi on the external debt side.

  • Gov’t adds GH¢7.14bn to its debt

    Gov’t adds GH¢7.14bn to its debt

    Adnan Adams Mohammed

    Government, through the Bank of Ghana, has increased its domestic debt by GH¢7.148 billion through the sale of Treasury bills in August 2022.

    The sales realized were about 39.70% more than its target of GH¢5.117 billion, largely used to refinance maturing debts.

    However, the rising interest rates deepen investor interest in the short-term securities.

    The yield on the 91-day Treasury bills increased to 28.61% at the end of August 2022 (+227 basis points).

    The clearing rates for 182-day and 364- day maturities were however 29.94% (+188 basis points) and 29.52% (+167bps) respectively.

    Meanwhile, the government will this week raise ¢1.682 billion across the 91-day to 182-day Treasury bills.

    The funds will be used to refinance total maturities worth ¢1.567 billion.

    Due to increased sovereign risk, investors reduced their exposure to Government of Ghana bonds, increasing demand for T-bills.

    The Treasury exceeded its target for last week’s T-bill auction with a target-coverage ratio of 1.03, raising ¢1.776 billion.

    The Treasury accepted all bids with a discount rate quote of 26.50%-27.47% for the 91-day, 25.33%-26.84% for the 182-day, and 22.50%-23.20% for the 364-day.

    The 91-day bill cleared at 29.05% (+43bps), with the 182-day and 364-day bills settling at 30.23% (+29bps) and 30.02% (+49bps).

    T-bills sale begun the year with a yield of 12.52% for the 91-day bill and 13.19% for the 182-day.

    Government was expected to borrow ¢4.59 billion as fresh funds in the second quarter of this year to finance part of its budget.

    This was higher than the ¢3.78 billion borrowed in the first three months of 2022.

    Chunk of the monies were expected to have come from the 91-day and 182-day Treasury bills.