Osei Kyei-Mensah-Bonsu, the Minister for Parliamentary Affairs and caretaker Minister for Finance, has blamed the country’s ballooning debt stock on the impact of the COVID-19 pandemic, among other things.
Mr. Kyei-Mensah-Bonsu stated during the presentation of the 2021 budget in Parliament which was monitored by our news team that the provisional debt stock, which stood at GH291.614 billion, representing 76.1 percent of GDP, “included the fiscal impact of COVID-19 – GH19.7 billion, cost of financial sector clean up – GH21 billion, cost of excess capacity charges paid to IPPs – GH12 billion, and the impact of the reduction in 2020.
“As of the end of December 2020, the provisional debt stock stood at a nominal figure of GH291.614 billion, representing 76.1 percent of GDP, compared to GH217.991 billion, equivalent to 62.4 percent of GDP in 2019,” he added.
He also stated that these expenses had to be addressed as soon as possible.
According to Osei Kyei-Mensah-Bonsu, the caretaker Minister of Finance, if the expenses for the COVID-19 pandemic, as well as the banking sector clean-up, were removed from the list, the total debt stock would have been significantly reduced.
“If these expenditures are excluded, and the drop in GDP growth in 2020 is primarily due to the COVID-19 pandemic, the total stock of debt for 2020 would have been approximately GH238.9 billion, implying a debt to GDP ratio of 58.7 percent.”
Mr. Kyei-Mensah-Bonsu went on to say that the 2021 budget will ensure economic recovery and macroeconomic stability by implementing well-thought-out measures that will get the economy moving again.
He also stated that the pandemic has devastated many economies around the world, including Ghana, and that the unexpected turn of events necessitated quick action to deal with the negative impact of the pandemic.