As president Nana Akufo-Addo prepares to deliver the State of the Nation Address, Finance Minister Ken Ofori Atta has disclosed that Ghana debt as a percentage of GDP has hit 74 percent.
By the third quarter of 2016, figures released by the Bank of Ghana showed that the country’s debt stock had reached GH¢112.4 billion representing 67.4 percent.
It is not clear whether the 6.59 percent increase is due to fresh expenditure incurred in the last quarter of 2016, or due to the depreciation of the cedi which normally affects the foreign component of the debt stock.
Speaking to Citi Business News, Mr. Ofori Atta was optimistic the decision to grow the private sector will help turn the economy around by close of year.
“I have a debt profile which is 74 percent of my GDP and therefore with a negative budget balance I can only pay my interest and that interest isUS$ 2.4 billion a year. And then I’m adding to the stock,” he said.
“When moving into the calculus of the numbers, I called a breakfast meeting in the morning. What are the bold things we should do in the budget? So we can begin to think out of the box, because we have to take some risks. Bold and imaginative risks. And that’s my challenge,”he added.
He assured that government will present a comprehensive budget that will address all challenges with the growing debt inherited from the previous administration to free the private sector.
“You have the revenues, you have your expenditures and you have your debt. You need to navigate to tackle these in a way in which the country will be free to be productive. So I need to look at the debt and see how I can long date it and get lower interest rates. I need to look at the revenue,” he said.
Mr. Ofori Atta was optimistic the private sector will take advantage of the tax cuts that will be announced in the budget to increase production, hence the national income.
“The question will be asked, how are you going to have tax reliefs when you don’t have enough revenue, you have to believe that in giving those tax reliefs Ghanaians will respond to the moment and that by the end of the year it will turn around”.
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