The Minister for Parliamentary Affairs and caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu has blamed the country’s ballooning debt stock on the impact of the COVID-19 pandemic among others.
Speaking during the presentation of the 2021 budget in Parliament, Mr. Kyei-Mensah-Bonsu stated that the provisional debt stock which stood at GH¢291.614 billion representing 76.1% of GDP “included the fiscal impact of COVID-19 – GH¢19.7 billion, cost of financial sector clean up – GH¢21 billion, cost of excess capacity charges paid to IPPs – GH¢12 billion and the impact of the reduction in growth from an average of 7% (2017-2019) to 0.9% in 2020”.
“The provisional debt stock as of the end of December 2020 stood at a nominal figure of GH¢291.614 billion representing 76.1% of GDP, compared with GH¢217.991 billion equivalent to 62.4% of GDP in 2019,” he added.
He also stated that these expenses had to be dealt with as a matter of urgency.
According to the caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu, if the expenses spent on the COVID-19 pandemic, and the banking sector clean up among others were taken out of the list, the total debt stock would have significantly reduced.
“If these expenditures are excluded and the drop in GDP growth in 2020 primarily attributable to the COVID-19 pandemic is taken into account, the total stock of debt for 2020 would have been approximately GH¢238.9 billion implying a debt to GDP ratio of 58.7%.”
Mr. Kyei-Mensah-Bonsu further stated that the 2021 budget will ensure economic recovery and macroeconomic stability through the rolling out of well-thought-through measures that will set the economy back in motion.
He also explained that the COVID-19 pandemic has devastated a lot of economies around the world with Ghana inclusive, adding that the unexpected turn of events required swift action to deal with the negative impact of the pandemic on livelihoods.
