Domestic component of public debt increase by 19.6% YoY
Domestic component of Ghana’s total public debt increased to GHS 179.4bn in the year 2021.
Compared to the previous year, the increment mark a 19.6% year-on-year in the country’s domestic debt which has now inched up to 40.7% of Gross Domestic Product (GDP).
According to the Bank of Ghana’s January 2022 Monetary Policy Report, total domestic debt as at November 2021, accounted for 52.1% of total public debt, a little over the 51.4% recorded in December 2020.
Per the report, the increase in domestic debt was driven by increases of GH¢5.9 billion and GH¢22 billion, respectively, in the short- and medium-term instruments.
In terms of the holding structure, the year-to-date rise in the domestic debt reflected in increased holdings in the banking and non-bank sectors.
With regards to external debt, external debt on year-to-date basis increased by GH¢23.4 billion from GH¢141.8 billion (37.0% of GDP) at the end of December 2020 to GH¢165.1 billion (37.6% of GDP) as at November 2021.
External debt constituted 47.9 percent of total public debt at the end of November 2021, compared to 48.6 percent in December 2020.
The country’s debt stock increased to GH¢344.6 billion at the end of November 2021 from GH¢291.8 billion at the end of 2020.
Read: Interest payments constitute 50.4% of revenue as payments hit GHS 33.61bn in 2021
In terms of GDP, the total public debt as at end-November 2021 was 78.4 percent, higher than the 76.1 percent registered in December 2020.
For the year 2021, the report asserts that government budgetary operations resulted in an overall budget deficit of GH¢42,523 million (9.7% of GDP) at the end of 2021. This was higher than the expected target of GH¢41,272.9 million (9.4% of GDP).
In addition, the primary balance for the period under review recorded a deficit of 2.0 percent of GDP, achieving its target for the year in review.
The overall fiscal deficit of GH¢42,523 million was financed mainly from domestic and external sources. Domestic financing (net) was GH¢23,892.3 million (5.4% of GDP), substantially lower than the target of GH¢26,506.5 million (6.0% of GDP).
Foreign financing, on the other hand, was a net inflow of GH¢12,481.1 million (2.8% of GDP), lower than the target of GH¢15,874.3 million (3.6 % of GDP).
Total expenditures & arrears clearance for 2021 was GH¢110,401.70 million (25.1% of GDP), below the target of GH¢113,750.23 million (25.9% of GDP). This outturn was 97.1 percent of the target and represented a year-on-year growth of 10.3 percent.
Meanwhile, total Revenue & Grants for 2021 was GH¢67,878.7 million (15.4% of GDP), lower than the target of GH¢72,477.4 million (16.5% of GDP). This outturn represented 93.7 percent of the 2021 target and recorded a year-on-year growth of 23.1 percent.
During the review period, domestic revenue totaled GH¢66,696.44 million (15.2% of GDP), below the target of GH¢71,012.22 million (16.2% of GDP). The revenue outcomes reflected mixed performances for both tax and non-tax proceeds.
