The Parliamentary Select Committee on Finance, in its report on the Annual Public Debt for the 2018 financial year revealed that, the implementation of the 2018 Medium Term Debt Strategy (MTDS), faced challenges as a result of global market developments, which led to investors sell-off in emerging markets.
According to the Report, Government’s Medium Term Debt Strategy (MTDS), is to bring the public debt level to below 65% of GDP over the Medium Term.
The Annual Public Debt Report which was presented by the Chairman of the Committee and Member for the New Juaben South Constituency, Hon. Dr. Mark Assibey-Yeboah, recorded GHS 86,169,000,000 as provisional results for 2018 External Public debt, while the Domestic Public Debt stood at GHS 86,899,700,000 respectively.
Hon. Dr. Assibey-Yeboah explained that, to address the external financial contagion effect of the investor pull-out from emerging countries, which affected non-resident investors’ participation in the domestic markets and posed unanticipated pressure on the Cedi, the approved strategy was redirected to focus on increased engagement with domestic investors, and more active Government support for the functioning of the secondary market.
Presenting the report on the floor of Parliament, Hon. Assibey-Yeboah, also stated that the objective of the government’s debt management is to ensure government’s financing needs are met on a timely basis at the lowest cost with a prudent degree of risk, while promoting the development of debt market.
He indicated that for the year under review, the Medium Term Debt Management Strategy (MTDMS) was to finance the budget deficit using domestic securities and external financing, including the International Capital Market (ICM).
Adding that the implementation of the 2018 MTDS faced challenges as a result of global market developments, which led to investors sell-off in emerging markets.
A breakdown on Gross Public Debt from 2014-2018, according to the report
In the report, the External Public Debt as of 2014 stood at GHS 44,530,000,000 while Domestic Public Debt as of 2014 stood at GHS 79,570,200,000.
In 2015 Financial Year
In 2015, the External Public Debt stood at GHS 59,912,800,000 while Domestic Public Debt stood at GHS 40,322,100,000.
2016 Financial Year
The 2016 External Public Debt of the country stood at GHS 68,859,600,000 while Domestic Public Debt stood at GHS 53,403,400,000.
2017 Financial Year
In 2017, the External Public Debt of the country stood at GHS 75,847,500,000 while Domestic Public Debt stood at GHS 66,769,100,000.
It was also recorded that the provisional results for 2018 External Public debt stood at GHS 86,169,000,000 while the Domestic Public Debt stood at GHS 86,899,700,000.
The Ranking Member of the Finance Committee and Member for Ajumako-Enyan-Essiam Constituency, Hon. Cassiel Ato Forson, in his contribution to the extensive debate on the report, said there is not enough revenue to service the debt of the country.
Hon. Forson also argued that the government is not mobilising for much foreign exchange to service the country’s debt.
According to the Ajumako-Enyan-Essiam legislator, the country is getting to a level where it would be impossible to service its debt.
Source: Blessing Roselyn Boateng/Editor/Newslinegh.com