According to the International Monetary Fund (IMF), Ghana’s total public debt could hit the dreaded 70% mark by the end of this year.
If this prediction by IMF Fiscal Monitor – released at the on-going IMF/World Bank spring meetings in Washington DC – comes to pass, then it would be official that Ghana is a Highly Indebted Poor Country (HIPC).
According to the United Nations and World Bank, any time a country’s public debt hit or crosses the 70% of its Gross Domestic Product (GDP), then that country can be described as highly indebted.
That means it would be difficult for that country to settle its debts on time.
Joy Business has also gathered that the IMF has also classified Ghana among the high risk of debt distress countries.
This has resulted in the IMF pushing Ghana to stop borrowing on the commercial market, with the exception of the June bonds issue which will be used to repay maturing debts.
Until Ghana’s debt position improves the Fund might not sanction the country’s attempts to secure new loans on the commercial market.
According to Bank of Ghana, as at the end of December 2014 Ghana’s public debt stood at GH¢76 billion, representing about 67 percent of the Ghana’s GDP.
An assessment of loans approved by Ghana’s legislature since January 2015 points to the likelihood that the country’s debt stock could cross the 70% mark before the end of 2015.
However, Deputy Finance Minister, Mona Quartey, has ruled out the possibility of HIPC status for Ghana.
According to her, Government is showing “more discipline” in managing its debts.
She maintains that very soon the rewards of such discipline would become apparent.
“We are not going to HIPC. We are going into a three-year IMF programme. We have been there [HIPIC] once and we are not going back there”, she told Joy Business.
“We move forward not backwards” she encouraged, saying Ghanaians should “declare and decree” positive confessions.
Meanwhile, persons close to government tell Joy Business managers of Ghana’s economy are working to prevent the country’s debts from hitting alarming levels by ensuring that state institutions borrow on their own books.