Debt Accumulation: Seth Terkper urges Government to prioritize debt repayment system for fiscal stability
Former Finance Minister Seth Terkper has emphasized the urgent necessity for the Government to institute a structured debt repayment system.
Making the assertion during a recent virtual media dialogue on the State of the Ghanaian Economy and the IMF Programme, Mr Terkper articulated that Ghana cannot solely rely on economic growth to alleviate its debt burdens without such a mechanism in place.
Drawing from his tenure as Finance Minister, he highlighted the efficacy of a sinking fund in curbing debt accumulation, citing its instrumental role in repaying a substantial $750 million debt incurred by the previous Kufuor administration.
With a tone of pragmatic foresight, he underscored that sustainable debt management necessitates proactive measures beyond mere economic expansion.
Data from the Central Bank revealed that the external component of the total public debt stood at $30.1 billion (¢350.3 billion) in December 2023. This represented 41.6% of GDP.
In terms of the domestic debt, it stood at ¢259.7 billion in December 2023, about 30.1% of GDP.
Meanwhile, the International Monetary Fund (IMF) is forecasting a consistent decline in Ghana’s Debt-to-Gross Domestic Product (GDP) ratio in the next six years.
In its April 2024 Fiscal Monitor, the Fund said Ghana’s debt-to-GDP will plummet to 69.7% in 2029.
In 2024, the debt-to-GDP ratio is estimated at 83.6%, whilst that of 2025, 2026, 2027 and 2028 are pegged at 80.9%, 77.9%, 74.9% and 72.0% respectively.
