President Nana Addo Dankwa Akufo-Addo says the Government will implement measures to reduce Ghana’s public debt to Gross Domestic Product (GDP) to 55 per cent by 2028.
The six-year targeted measure is to ensure that the country restores and keeps its debt sustainable.
Data by the Bank of Ghana (BoG) shows that Ghana’s debt, which was GHS291 billion (76 per cent of GDP) in 2020, and GHS351.8 billion (80.1 per cent of GDP) by the end of 2021, has increased to GHS402.4 billion as of August 2022.
In his address on the economy on Sunday evening, President Akufo-Addo said the budget for the 2022 fiscal year had been thrown out of gear, disrupting balance of payments and debt sustainability.
He explained that “the basic problem we face is that we are not making as much money as we need to spend, and what little money we do make is going to pay for the debts we have contracted to fund the development projects we must have.”
“To restore and sustain debt sustainability, we plan to reduce our total public debt to GDP ratio to some 55 per cent in present value terms by 2028, with the servicing of our external debt pegged at not more than 18 per cent of our annual revenue also by 2028,” the President said.
He said he was confident that with a united front and support to the Government’s macroeconomic measures to the current economic challenges, “we will emerge victorious from our current difficulties.”
Among others, he said the Government would continue to cut the salaries of political office holders and discretionary expenditures of Ministries, Departments and by 30 per cent in 2023.
“We are committed to improving the revenue collection effort, from the current tax-revenue to GDP ratio of 13 per cent to between 18-20 per cent, to be competitive with our peers in the West Africa Region,” President Akufo-Addo assured.
He also said the Government would in six months review the standards needed for imports into the country and review the management of foreign exchange reserves to support economic growth.
He said the Government, through the support of the banking sector, would intensify the manufacturing of products such as rice, poultry, vegetable oil, toothpicks, pasta, fruit juice, bottled water and ceramic tiles to reduce its importation.
President Akufo-Addo encouraged traders to ensure that goods in shops and marketplaces were produced and manufactured in Ghana.
“That is why we have to support our farmers and domestic industries, including those created under the 1-District-1-Factory initiative, to help reduce our dependence on imports, and allow us the opportunity to export more and more of our products, and guarantee a stable currency that will present a high level of predictability for citizens and the business community,” he said.
“I have total confidence in our ability to work our way out of our current difficulties. We are not afraid of hard work. We will triumph, as we have triumphed many times before,” the President added.