• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Economy

Bawumia: Gov’t must curtail non-concessional borrowing; cease reliance on Int’l markets

3 years ago
in Economy, Features, highlights, Home, home-news, latest News
2 min read
0 0
0
97
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Bawumia: Gov’t must curtail non-concessional borrowing; cease reliance on Int’l markets

Vice President, Dr Mahammudu Bawumia, has said government needs to curtail non-concessional borrowing and cease its reliance on the international capital markets.

Speaking at the Accra Business School on Thursday, July 14, 2022, under the theme: ‘The Role of Information Technology Education in the Government’s Digitalisation Agenda’, the Vice President noted Ghana’s reliance on the international markets makes it vulnerable when the capital markets are ‘shut’ to emerging markets by investors.

According to the Vice President, Ghana borrows $3bn annually from the international market to meet its fiscal needs.

“We have to curtail non-concessional borrowing and our reliance on capital markets, the country’s reliance on the capital market to meet its $3bn fiscal needs every year, exposed the vulnerability of the country when the capital market was shutdown to emerging markets.

“This has heightened the need to build reserve buffers to cater for unanticipated shocks like the Covid and Russia-Ukraine war,” he said.

Speaking further at the event, the Vice President attributed the country’s economic woes and return to the IMF to the quadruple whammy. 

RelatedPosts

Chamber of Agribusiness Calls for Sector-Wide Price Cuts and Urgent Government Support to Curb Food Crisis

The Perils of Market Interventionism: When Political Pressures Threatens Ghana’s Economic Gains – The Way Forward

GAB Projects Drop in Lending Rates Starting August 6 Following BoG’s 300bps Policy Rate Cut

According to him, had it not been the fiscal impact of the quadruple whammy, Ghana would not have sought for help from the IMF.

The quadruple whammy he explained were the energy sector excess capacity payments, the banking sector clean-up, COVID-19 and the Russia-Ukraine war.

Dr Bawumia said, the excess capacity payments of GHC 17 billion relate to a legacy of take or pay contracts that saddled the country’s economy with annual excess capacity charges of close to $1 billion. 

Dr Bawumia said these were basically contracts to supply energy to Ghana in excess of Ghana’s requirements, but we were obligated to pay for the power whether the country uses it or not.

The excess capacity payments, he indicated, includes GHC 7 billion of payments for gas resulting from the previous government signing an offtake agreement for a fixed quantity of gas with ENI Sankofa on a take or pay basis which was way in excess of what was needed at the time.

“Not keeping up with the excess capacity payments would have meant throwing the country back into a new bout of dumsor.”

Bawumia said the country was also confronted with a banking crisis as a result of the mismanagement of the banking sector.

He said Ghana’s banking system was on the verge of collapse and not dealing decisively with it would have meant disaster for the economy with millions of people losing their savings.

“Direct COVID-19 expenditure amounted to GHC 12.0 billion, made up of GHC8.1 billion in 2020 and GHC 3.9billion in 2021.”

He indicated that the three items of expenditure cumulatively amounted to GHC54.0 billion (the equivalent of some US$7.0 billion), which was borrowed.

“The Ministry of Finance estimates that the interest payment on this borrowing for the three items amounts to GHC8.5 billion annually. This is some 23% of Ghana’s annual interest payments of GHC 37 billion,” he said.

“It should be noted that without the GHC54.0 billion debt for the three exceptional items (COVID-19, Financial Sector and Energy), Ghana’s debt to GDP would be within the sustainability threshold of some 68% instead of the 76.6% at the end of 2021.”

“If you take out the fiscal impact of this quadruple whammy, Ghana will not be going to the IMF for support because our fiscal, debt and balance of payments outlook would be sustainable.

“Of the four factors, two (COVID-19 and the Russia Ukraine war) were external and the other two (the banking sector clean up and the excess capacity payments) were the result of policies of the previous government,” he added.

Source: norvanreports
Tags: Bawumia: Gov’t must curtail non-concessional borrowing; cease reliance on Int’l marketsghanaIMF
No Result
View All Result

Highlights

Local Bourse Rallies Strongly as GSE-CI Hits Near 7,000 Mark

Treasury Exceeds Auction Target of GHS 3.86 Billion Amid Tightening Yields

BoG Raises GHS 15.38 Billion via 56-Day Bills to Reinforce Tight Monetary Policy Stance

Passage of Competition Law Key to Tackling DSTV’s Market Dominance – CUTS International

Why Are Interest Rates Still High? The MPR vs Market Rates Debate

Climate Change Is Making Africa’s Debt Burden Worse – New Debt Contracts Could Help

Trending

Agribusiness

Chamber of Agribusiness Calls for Sector-Wide Price Cuts and Urgent Government Support to Curb Food Crisis

August 4, 2025

Chamber of Agribusiness Calls for Sector-Wide Price Cuts and Urgent Government Support to Curb Food Crisis The...

The Perils of Market Interventionism: When Political Pressures Threatens Ghana’s Economic Gains – The Way Forward

August 4, 2025

GAB Projects Drop in Lending Rates Starting August 6 Following BoG’s 300bps Policy Rate Cut

August 4, 2025

Local Bourse Rallies Strongly as GSE-CI Hits Near 7,000 Mark

August 4, 2025

Treasury Exceeds Auction Target of GHS 3.86 Billion Amid Tightening Yields

August 4, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.