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Ghana’s debt hits 53.5% of GDP

By Elikem MENSAH

Ghana’s total debt stock has risen to US$7,683.4 million representing 53.5% of Gross Domestic Product (GDP) as at the end of September 2008 from US$7,411.7 million ( 51.4% of GDP) in 2007.

The stock of domestic debt increased to GH¢4,144.8 million representing 25.4% of GDP in September this year from GH¢3,708.2 million representing 26.5% of GDP at the end of 2007.

Ghana’s external debt by the end of September registered a total of US$4,030.0 million representing 28.1% of GDP, up from US$3,590.4 million (24.9% of GDP) at the end of December 2007 with most of the amount, approximately US$470.0 million, being owed to multilateral creditors.

The external debt stock at the end of the second quarter of 2008 stood at US$3,769.21 million, having fallen marginally by US$11.10 million from the stock position at the end of the first quarter.

Government has used a total of US$95.74 million in servicing the country’sexternal debt, bringing to US$161.93 million total debt financing since January.

The debt service payments in the second quarter was made up of principal payments of US$48.43 million and interest payments of US$47.30 million. These payments included the first coupon payments of government of government’s 10-year sovereign bond issued in the third quarter of 2007.

Additionally, during the second quarter of 2007, a total of US$45.85 million which is made up of principal payments of US$32.16 million and interest payments of US$13.69 million were made.

However, government plans to maintain what it regards as a healthy mix of both concessional and non-concessional loan financing in line with new financing strategies, set up effort at mobilizing more programme type aid and seek more grants to finance poverty reduction and growth enhancing activities.

With regard to domestic debt management, government plans to establish a primary dealers system to encourage competition and trading in government securities in order to boost secondary market activity. It will also continue the process of lengthening the domestic debt profile through the issuance of longer maturity debt instruments.

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