The 2018 Annual Public Debt Report is one of the deliverables of the Ministry of Finance (MoF) with the primary objective of disseminating information on public debt operations carried out by Government of Ghana (GoG) during the 2018 financial year.
The importance of sound public debt management as a central part in preventing economic crises has become increasingly evident, and has further emphasized the need for strong coordination between fiscal, debt and monetary policies.
Over the years, revenue shortfalls and expenditure overruns led to widening fiscal deficits which were financed mainly through debt, highlighting the growing need for prudent debt management to ensure the greater ability to finance increasing fiscal deficits.
However, the Fiscal Responsibility Law which was passed in 2018 is expected to minimise the impact of the residual fiscal balance on the public debt. In 2018, macroeconomic fundamentals on the domestic front strengthened due to improvement in the trade balance, a decline in the fiscal deficit, upgrade in Ghana’s sovereign ratings and a resilient financial sector.
On the international scene, however, emerging markets were faced with economic challenges attributed to increasing oil prices, rising US Federal Reserve policy rates and an appreciating United States Dollar (USD), amidst international trade tensions, Brexit uncertainties and geopolitical conflicts.
These factors created bigger challenges on public debt management, especially for countries with high external financing requirements. As a result, there were significant outflows of foreign holdings in domestic instruments, which ultimately triggered local currency depreciation against the USD in these countries.