Government tackles national debt in 2014 budget

The government has outlined measures to tackle Ghana’s national debt, which currently stands at GHc43.9 billion (49.5 per cent of Gross Domestic Product (GDP)) at the end of August 2013. 

They include refinancing and extending the tenure of loans and bonds for financing the capital budget and implementing recovery schemes such as Escrow for commercially viable projects.

The Minister for Finance and Economic Planning, Mr Seth Terkper, who made this known Tuesday while reading the 2014 budget statement, said a debt service account with a foreign exchange component will also be established to provide certainty of interest and loan repayments.

Mr Terkper said the government had already undertaken a thorough review of existing loans and facilities and had decided to contract new loans only on a certain basis.

He said the measure was part of a comprehensive debt restructuring and management review.

Mr Terkper said government had also decided to suspend the award of new major contracts in 2013 to enable Municipal and District Assemblies (MDAs) focus on ongoing projects. 

The World Bank had in October cautioned Ghana against its rising debt, which it says has the tendency to stifle the country’s economic growth and deepen poverty.