Ghana’s public debt has increased by 23 per cent according to finance minister Seth Terkper on Tuesday.

Mr Seth Terkper delivering the 2013 budget statement in parliament said the debt which includes government guaranteed debt, increased from US$18832.77 million by end-December 2012. This represents 40.8 per cent of GDP in 2011 and 49.4 per cent of GDP by end December 2012.

He said domestic debt grew by 30 per cent between 2011 and 2012, to constitute 53 percent of the total public debt, compared to 47 percent for external debt. The minister said the debt was an accumulation of debts of all successive governments and included those owed to the World Bank and other international finance institutions.

“A combination of factors including the reduction in the availability of concessional funds as a result of the Euro financial crisis, contributed to the increase in non-concessional borrowing to finance infrastructure projects. The increased public debt was also due to issuance of longer-dated domestic debt instruments,” he said.

Mr Terkper stated that the eastern corridor roads, gas processing plant, Wa and other hospital projects, rehabilitation of the Western railway line, retooling of the Ghana Police Service and provision of other essential equipment to the military were some priority and self financing projects for which the debts were issued.

He said although the rise in total debt had shaken a section of Ghanaians for fear of sustainability implications, they will not pose any threat to debt sustainability of the country; “Government knows the sources of budget deficits and will seriously take steps to address them”.

The National Democratic Congress’ government has been accused by the minority New Patriotic Party for increasing the public debt from GH¢9.5 billion at the beginning of 2009 to a whooping GH¢33.5 billion.

The NPP Minority accused the government of uncontrolled expenditures during the 2012 electioneering campaign and therefore called on government to explain in detail what those monies were used for.