Finance Minister compares and justifies 76.1% debt-to-GDP to risen debt stock of South Africa, Rwanda, UK

Minister for Finance, Ken Ofori-Atta, has made a justification for the sudden rise in the country’s public debt stock as a ratio of Gross Domestic Product (GDP).

Speaking at a presser on Sunday, May 9, following the massive social media campaign dubbed #FixTheCountry by which the Ghanaian youth are demanding for good roads, quality education, better healthcare systems, jobs among others, the Finance Minister opined that the negative impact of the pandemic resulted in a relapse of the country’s debt situation.

According to him, measures taken by government to curb the spread of the virus and to protect the lives of Ghanaians came at a cost the State which is evidenced by the elevated position of the nation’s public debt stock.

To make his case and establish his argument, the Finance Minister compared Ghana’s current debt stock to that of countries like South Africa, Rwanda, Zambia and the UK who have all seen astronomical rise in their debt stock on the account of the Covid-19 pandemic.

“Measures taken to protect Ghanaians have come at a cost as seen in a sudden relapse in the country’s debt situation from 62.4 percent in 2019 to 76.1 percent in 2020. However, the sudden rise in debt by countries around the world over the same period may be indicative of the times we live in, South Africa moved from 62.2 percent in 2019 to 82.6 percent in 2020, Rwanda from 50.7 percent in 2019 to 61.6 percent in 2020, Zambia from 91.9 percent in 2019 to 119.97 percent in 2020 and the UK from 85.4 percent in 2019 to 100.9 percent in 2020,” stated the Finance Minister.

Speaking further, the Minister stated that the downward revision of government revenue by Ghs 13.4 billion (3.5% of GDP), additional expenditure of Ghs 11.8 billion (3.1% of GDP) with a combined fiscal impact of Ghs 25.2 billion (6.5% of GDP) – Covid-19 and financial sector costs – accounted for the increment in the nation’s debt stock.

Adding government is looking at ‘fixing’ Ghana’s rising debt burden which has shot up from 62.4 percent (Ghs 122 billion) in 2019 to 76.1 percent (Ghs 291 billion) in 2020.

In response to issues raised by the Ghanaian Youth through the #FixTheCountry campaign, the Minister noted he is working closely with the Water and Sanitation Ministry, Ministry of Roads and Highways to immediately ensure potable water are supplied to areas of critical need and congestion along major highways are also addressed.

He also stated that government is going to fast track the $222 million job and skills programme and economic transformation to significantly enhance job creation. Further asserting that government starting this month is going to roll out additional eight (8) interventions under the Ghana CARES programme in the health, agriculture, tourism, trade and digitisation, science and technology, house and finance sectors of the economy.

“At best, we should open for all Ghanaians an economic system under which it’s citizen is guaranteed the opportunity to show the best in him or her, I commit to work and fix the structures that will set Ghana’s economy on the right path that ensures open access and property ownership for all,” concluded the Finance Minister.