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Ghana’s public debt rises to GH¢200b in May as government adds GH¢46b more

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In 2015 when Ghana signed up to the three-year International Monetary Fund (IMF) Extended Credit Facility (ECF) for an amount of $918 million, the IMF classified the country as ‘high risk of debt distress.’ The country was so classified because of the level of its public debt. Four years later, in 2019, the country’s debt situation hasn’t improved, despite government’s touted ‘Ghana Beyond Aid’ mantra.

The country has also been cited as one of the 11 countries in Africa facing high risk of debt distress in the Economic Report on Africa 2019.

The Economic and Financial data released today by the Bank of Ghana puts Ghana’s total public debt at GH¢200 billion, which is 58.1 per cent of GDP, an increase of GH¢46 billion as at May 2019.

External debt is GH¢105.4 billion, at 30.6 per cent of GDP and domestic debt is GH¢94.6 billion, which is 27.4 per cent of GDP.

The public debt is however, expected to rise as the country enters an election year.

“Ghana’s public debt profile and associated servicing costs are expected to rise more so as it heads into the crucial 2020 elections cycle with rising public demand on the lack of improvement in living conditions,” economist, Dr. Theo Acheampong told ghanabusinessnews.com.

According to Dr. Acheampong, the current administration’s ambitious public-spending programme through the ‘One District, One Factory’ and Planting for Food and Jobs’ initiatives, and rolling out of free secondary education, known as Free SHS which is yet to be fully materialized.

“And given the declining domestic revenue mobilization effort, as well as the expected pressure of the elections, one can surmise that the debt levels are highly likely to further increase, possibly hitting 60 to 62 per cent of the new GDP or 75 per cent of the old GDP by end of 2020,” he added.

Dr. Acheampong pointed out further that  a lot of these new debts are not necessarily going into financing critical infrastructure to catalyse economic growth but retiring old debts, some of which went into non-strategic white elephant projects.

“A large chunk of Ghana’s government revenues will be spent on servicing the country’s foreign exchange-denominated (mostly dollar: 67 per cent) debt. Total external debt service on central government debt amounted to $2.5 billion in 2018 alone (interest payment is 30 per cent of this amount). In contrast oil revenues from January to September 2018 amounted to $724 million. Just enough to service the interest payments on external debt!” he said.

By Emmanuel K. Dogbevi
Copyright ©2019 by Creative maginations Publicity
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.

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Cabinet approves proposals for academic user fees

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Dr Mathew Opoku Prempeh, the Minister of Education, has announced that cabinet has approved proposals for a review of academic user fees of students.

He said this was done last month and have been forwarded to Parliament for ratification.

Dr Prempeh said this in a speech read on his behalf at the 11th Congregation of the University of Mines and Technology (UMaT), Tarkwa.

“I am aware of concerns within the university community on the matter of academic user fees, which have not been increased for three years. I wish to state that, this has primarily been due to the new procedure for approval of these fees by Parliament” he explained.

On the issue of clearance for some universities to replace staff, he said the Ministry of Finance was working on its backlog with urgency and that would be fully resolved before the end of August 2019.

The Government appreciates and understands the need for some staff beyond the age of 65 to be retained, especially for the depth of their experience and ability to continue to enrich faculty, Dr Prempeh explained.

He said there were constitutional implications of maintaining such staff on government payroll and rather, they should be paid from Internally Generated Fund.

“Government accepts the position that there should have being a constitutional amendment to increase the age of retirement to bring such faculty members within the constitutional framework, and Parliament is in the process of considering same” he said.

The Minister pointed out that the government was aware that one of the implications of its Free Senior High School policy was an increase in the number of students seeking university admission come 2020/21 academic year when the first cohort of students under the programme complete their West African Senior School Certificate Examination (WASSCE).

He stated that under a $500 million infrastructure upgrade through the GETFund securitisation, universities like UMaT would receive favourable consideration.

This, he said, was primarily because UMaT had remained focused on its core mandate in respect of the nature of programmes it run and the  government believes this was important in developing and nurturing talents in Science, Technology, Engineering and Mathematics (STEM) subjects.

He congratulated the Vice Chancellor, Professor Jerry Kuma for his passion in ensuring the UMaT continued to employ the best standards in the training of their students.

Mr Kwabena Okyere Darko Mensah, Western Regional Minister, promised to get in touch with the Minister of Lands and Natural Resources Mr Asomah Cheremeh to ensure that all legacy projects in UMaT were completed as soon as possible to improve academic work.

Source: GNA

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Ghana government to train to 12,000 entrepreneurs in three years – Minister

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Ibrahim Awal Mohammed

Dr Ibrahim Mohammed Awal, Minister for Business Development, has said private sector remains the engine of growth which could move the country to its desired level.

In this regard, he said it is the goal of government to train and mentor 12,000 entrepreneurs nation-wide to enhance their businesses within three years adding that beneficiaries of the training would also have access to a GH¢100 million loan with 10 percent interest rate.

Dr Awal, who made this known during the fourth breakfast meeting for Chief Executive Officers in the Western Region, said so far a total of 300 entrepreneurs have been trained in the region.

The meeting, organized by the Ghana Employers Association (GEA), was to enable the CEOs interact and discuss pertinent issues that would enhance the growth and development of their businesses.

He said the government has put in place five driving force pillars, made up of modernization of agriculture, infrastructural development, human resource development, entreprenurship and industrialization to help develop the private sector.

He said under the modernization of agriculture ‘the Planting for Food and Jobs’ and the ‘One District one Factory Programmes’ would be implemented, adding that in the past two years about a million people have been engaged in the PFJP.

For infrastructure development, the Minister said, government has made available about $2 billion to address the short falls in the sector adding that the road sector would be the major beneficiary.

He said everything was being done to address the human resource shortfall in the country, hence the introduction of the free senior high school programme and the TVET programme.

Dr Awal said a lot of avenues are being created for the private sector to strive adding that the skills development centre and community mining programmes being executed in the Western Region are some of the interventions being put in place by the government.

He said government would continue to give the private sector the needed space to operate since they are the major employers in the country- “over 13,000 people are being employed by the private sector”.

Mr Kwabena Okyere Darko-Mensah, the Western Regional Minister, also underscored the important role the private sector play in the growth of the economy and urged them to continue to play their roles effectively by paying their taxes.

He said a free zone enclave will be sited in the Western Region and that five private community mines would be established in the Amenfi area.

He said the business world is changing to a technology driven one and tasked them to brace themselves up and adapt the current technological world.

Mr Alex Frimpong Chief Executive Officer of GEA, said the lack of affordable capital, ready market, technology and human resources were the major challenges facing many businesses in the country.

He called on the government to assist them by getting them affordable loans and ready market to enable them stay in business.

Many of the participants expressed concern about the numbers of taxes being introduced by the government, infrastructure shortfalls and the difficulties in assessing loans from the bank.

Source: GNA

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Violent extremism on the rise in West Africa – Chambas

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Dr, Mohammed ibn Chambas

West Africa, last year, saw a “significant rise in violent attacks directly related to violent extremism,” the Head of the United Nations Office for West Africa and the Sahel (UNOWAS), Dr Mohamed ibn Chambas, has said in his latest report to the UN Security Council in New York.

“The security situation remains volatile in the entire Sahel, where escalating violence and insecurity have sparked an unprecedented humanitarian crisis leaving a total of 5.1 million Burkinabe, Nigeriens and Malians in need,” he said in his briefing on the activities of UNOWAS.

Dr Chambas singled out Burkina Faso where in the past six months the security situation had deteriorated.

He said 226 security incidents contributed to a rise in the number of internally displaced people from 47,000 in December 2018 to 220,000 and more than 25,000 refugees in June this year.

“The north and east of the country remain the most affected by recurrent attacks of terrorist and armed groups as well as an increase in inter-communal violence with the involvement of seemingly uncontrolled self-defence groups,” Dr Chambas said

“Terrorist groups are furthermore directly targeting schools and forcing health centres to close.

“Today, a total of 2,024 schools and 37 health centres remain closed in Burkina Faso as a direct effect of this crisis.

“Amid this rapid escalation, Secretary-General [Antonio] Guterres has requested a significant scaling up of the United Nations’ response and put in place an Emergency Task Force on Burkina Faso,” he added.

The Task Force will meet immediate needs and tackle the structural causes of the insecurity.
Dr Chambas announced the launch of a $100 million Humanitarian Response Plan, which he said was already being revised because of rising costs.

The Lake Chad Basin, too, has seen an increase in violence from attacks launched by the Boko Haram offshoot, Islamic State West Africa Province, despite heightened counter-terrorism efforts, the report said.

He noted that the rise in violence in West Africa had been compounded by the growing links between terrorism, organised crime and inter-community clashes.

The situation was so serious that ECOWAS leaders decided at their June 29 meeting in Abuja to hold an extraordinary summit on terrorism in Ouagadougou on September 14.

“It aims at discussing a concerted security approach for West Africa and the Sahel and represents a unique window of opportunity to harmonise the fragmented security arrangements,” Dr Chambas told the Council.

On the political front, hr said: “Pre-electoral and post-electoral periods…continue to be characterised by tensions, antagonistic contests and disputes, including around non-consensual constitutional amendments.

“Addressing such potential sources of conflict remains a major priority ahead of the upcoming cycle of high-stake presidential elections in West Africa scheduled for next year in Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Niger and Togo.

“Furthermore, tensions around electoral periods derail the necessary attention to the pressing need to address questions of development and inequality,” he added.

Dr Chambas stated that “the journey of democratic consolidation in this region has not been easy and cannot be taken for granted.

“Several countries in the region continue to struggle with human rights challenges.

“I am particularly concerned about the instrumentalization of the judiciary for political objectives in some cases as well as a predominant sentiment of impunity for violent crimes, undermining respect for the rule of law.

“In this sense, I commend the exemplary path chosen by The Gambia, where the Truth, Reconciliation and Reparations Commission as well as the National Human Rights Commission have embarked on their challenging tasks in a credible manner that has contributed to transitional justice and social cohesion.”

There is going to be a Strategic Review of UNOWAS, which Dr Chambas hoped would “contribute immensely to respond to our quest for adequate resources to enable us to sharpen our tools for preventing conflicts and sustaining peace”.

Source: GNA

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