The Ministry of Finance has reassured investors Ghana’s fundamentals remain strong as attested by several factors including its growth in December, the strong reserves position and the Ghana Revenue Authority exceeding its target in 2021.
Ghana, it said, will continue to show leadership in this difficult post Covid era to build a sustainable, entrepreneurial nation while ensuring that growth, job creation and fiscal consolidation are not compromised, in line with the President’s vision of a Ghana Beyond Aid.
The assurance follows a widely circulated Bloomberg article that claimed Ghana’s debt has moved deeper into distress and making investors lose patience.
The Ministry, in response to the article, noted there are some serious factual errors in the article that gives investors some cause for concerns hence the need to correct them.
It indicated that the 81.5% end of year debt to GDP ratio quoted by Bloomberg is false because provisional nominal debt to GDP figures at the Ministry as of the end of November 2021, which is the latest available data, was 78.4%.
It stressed that December revenue collections are seasonally the largest for any year, and therefore unlikely the financing requirements in December will result in Ghana exceeding 80% debt to GDP by December 2021.
“The Bloomberg article gave wrong historical debt to GDP figures. It is essential we make the correction that Ghana’s debt to GDP figures a decade ago was 39.67% and 47.80% for 2011 and 2012, respectively and not 31.4% as stated in the Bloomberg publication.”
“Again, it is important to note that for the period prior to the COVID Pandemic, Ghana experienced an average debt-to-GDP ratio of 56.4% from 2015 to 2019. In 2020, Ghana’s GDP contracted by 0.4% because of the impact of the Covid-19 Pandemic on the economy. Financing of the additional Covid-19 related expenditures, in addition to revised revenue targets, due to the impact of the pandemic, led to an increase in debt-to- GDP from 62.4% in 2019 to 76.1% in 2020,” the statement said.
Read a copy of the full statement below:
Source: Mypublisher24.com