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Business News of Tuesday, 25 August 2020


We’ve managed Ghana's debt better – Dr Bawumia

Vice President, Dr. Mahamudu Bawumia play videoVice President, Dr. Mahamudu Bawumia

Vice President Dr. Mahamudu Bawumia, has said that the government has managed the public sector debt well.

He said on Peace FM Tuesday, August 25 that “In the year 2000, Ghana’s total debt was around GH¢9 billion and that was around 49 percent. Just GH¢9 billion debt got into HIPC, At that time inflation was around 40 percent, interest rates were in that range, exchange rate.

“Today, you are having a debt stock of GH¢200 billion cedis. We inherited a debt of GH¢122 billion but if you look at the rate of increase in the debt stock between 2016 and 2019 it is the lowest in a decade, between 2019 and 2019, if you include the banking sector bailout you have an increase in the debt stock of 9.3%, if you exclude the banking sector it is at 3.9 percent

Between 2018 and 2012 the rate of increase in the debt stock was 49 percent, 2012 to 2016 its was 19 percent and for 2016 to 2019 we are talking about 3.9% if you exclude the banking sector bailout, or 9.3 percent if you include it. So there is a lot of prudence notwithstanding the higher debt, levels but these debt levels are within a sustainable framework even though we have to manage.”

He further said the government of President Nana Addo Dankwa Akufo-Addo has superior records in all sectors of the economy as against the records of the National Democratic Congress (NDC) administration.

Dr Bawumia told Sefa Kayi that “In all the sectors our records are superior.”

He further explained that the government has been able to stabilize the economy in all sectors, slowed down the rate of debt accumulation and also reduced lending rate.

He said “When we came into office Ghanaians were saddled with a lot of difficulties but we have been able to manage the economy, delivered a few solid records.

“Our fiscal deficit between 2016 and 2019, we brought it down, 6.8 to 4.8 percent. Between 2016 and 2017 and 2019 we had surpluses for three consecutive years and that was the first time in a decade.”

He added “First time in a decade that we have had that then the rate of debt accumulation, increase in our debt stocks has also slowed down, the decline in inflation, interest rate, we have also seen a decline in the lending rate from 32 to 23 percent.

“The monetary policy rate came down from 25 to 14.5 percent, our trade surplus between 2017 and 2019, this is the first time in two decades that we have had trade surplus three consecutive years.

“Our exchange rate depreciation, the rate of depreciation has been halved to 50 percent less compared to what we inherited. That is a major achievement.”