Government will end the year with a debt-to-GDP ratio of 74.1 percent, according to the new Fiscal Monitor report released by the IMF in Washington DC.
The Fiscal Monitor report tracks the expenditure patterns of about 189 countries that are members of the IMF and proposes measures that can be instituted by governments of these countries to control public expenditure.
According to the report, Ghana will end 2016 with its debt-to-GDP ratio reaching 74.1 percent, a little bit higher than about 73 percent it recorded in 2015.
The fiscal monitor report is also forecasting that revenue will continue to improve for the country as government will end the year mobilizing more than the 29 billion Ghana cedis.
However, the projection by the IMF in terms of the country’s debt in relation to GDP raises some questions about programs being implemented by government to help bring down the public debt which hit 97 billion Ghana cedis in December last year to appreciable levels.
For some it was expected that Ghana’s debt figures will be going down because of programs being implemented by government, however, per the IMF projections it looks like it might rather be going up at the end of December.
Figures from Ghana’s statistical service suggest the economy is valued at about 133 billion Ghana cedis. But a source close to government has maintained the country’s debt-to-GDP ratio will improve to appreciable levels before the end of this year.
The source disclosed that this optimism is based on some policies that are being put in place to expand the economy and influence public debt to go down.
The source adds that since IMF projections are based on the size of the economy, when growth picks up, revenue, taxes and debt-to-GDP ratios will improve substantially in the coming months.
The source also maintains there have been instances when the Fund has missed out on its projections, insisting the projections by the Bretton-Woods institution is not set in stone.
The IMF also warned that Ghana will face some serious challenges when it comes to servicing debts on time.
The fund is basing its warning on the current debt position of government which the Fund is describing as vulnerable.
Speaking to Joy Business on the sidelines of IMF/World Bank spring meetings in Washington DC, Deputy Director at the Fiscal Affairs Department at the IMF, Abdelhak Senhadji, says they are hopeful the situation will improve if government continues with the program aimed at reducing the debt levels.
He however warned that the current situation is worrying.