The objectives of Government debt management are to ensure that Government’s financing needs are met on a timely basis at the lowest cost consistent with a prudent degree of risk, while promoting the development of the Ghanaian debt market.
Government’s Medium-Term Debt Management Strategy (MTDS) is to bring the public debt level to below 65 percent of GDP over the medium term. Based on this, Government undertook policies to lengthen the maturity profile of domestic debt and also built liquidity in some benchmark bonds to support secondary market trading.
The implementation of these policies has helped to promote the development of the domestic debt market. The total public debt on a nominal basis increased from GH¢122.3billion in December 2016 to GH¢142.6 billion in December 2017. External debt on a nominal basis rose from GH¢68.9 billion to GH¢75.8 billion over the period under review.
Similarly, domestic debt on a nominal basis rose from GH¢53.4 billion in 2016 to GH¢66.8 billion in 2017. As a percentage of GDP, domestic debt increased marginally from 31.9 percent to 32.7 percent.
However, external debt as a percentage of GDP decreased from 41.2 percent in 2016 to 37.1 percent in 2017. This rise in nominal domestic debt stock is attributed largely to increase domestic borrowing to finance the budget deficit in 2017.
