Even though government is feverishly dishing out financial instruments every week to solicit funds to support its operations, it still claims it’s not broke.
Finance Minister Seth Terkper, who recently disclosed this to Joy FM, an Accra-based radio station, stated: “The economy is not broke. We are even in an era where the Bank of Ghana (BoG) is not financing government: it has never happened,” he said.
Meanwhile, government has been borrowing every month through Treasury Bills to pay its workers.
In September, this year, it had to do a mop-up from cash previously released to Ministries, Departments and Agencies (MDAs) to pay its employees.
Borrowing records
The latest Monetary Policy Committee (MPC) report by the Bank of Ghana said the total national debt reached GH¢109.8 billion as at August, this year, representing a 65.9 percent of Gross Domestic Product (GDP).
In view of this, total revenue and grants to the country amounted to 9.4 percent of GDP as at June this year.
Also per its revised Issuance Calendar for Government of Ghana Securities for August – December 2016, government plans to issue an amount of GH¢25,270.00 million to rollover forecast maturities of GH¢23,853.56 million with the remaining amount of GH¢1,416.44 million being fresh issuance to meet government’s financing requirements.”
On average, an amount of GH¢60 million will be issued every 2-weeks for the 1-Year Note through the primary auction.
Counter revelation
Dr Nashir Issahaku, the Central Bank Governor, recently stated that the major risks to the country’s fiscal outlook included uncertainties in the international oil market, continued weakness in tax revenue mobilisation and wage pressures.
But Mr Terkper said government’s tax revenue mobilization was encouraging.
Budget deficit
Provisional data on execution of the government budget for the first half of 2016 showed a deficit of 3.1 percent of GDP against a target of 2.6 percent.
The higher than programmed deficit was primarily driven by shortfalls from income and property taxes and oil revenue.
According to the BoG Governor, “The materialisation of these risks could slow the pace of fiscal consolidation and hinder efforts to restore macroeconomic stability. Sustaining the fiscal consolidation process is therefore critical to attaining the medium-term inflation target.
“According to the IMF’s July World Economic Outlook, global growth prospects have weakened further following the UK vote to leave the EU. In addition to the lower growth forecasts, there are expectations of sustained low and negative interest rates across global financial markets, while the U.S. Fed inches closer to a year-end rate hike.
These developments could have implications for Ghana’s balance of payments.”
Uncleared cheques
Prior to the Bank of Ghana’s announcement of the total national debt situation of the country on September 18, there were claims by Minority Members of Parliament that cheques issued by the Common Fund Secretariat to pay some suppliers had not cleared.
Source: Daily Guide
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The NDC government knows that some tribes will vote for them, so they don't care a fig about their lootings. Ghana has become a lawless state.
Dr Bawumia warned this NDC vermins that over borrowing expedition and using the economy as a propagada tool will not help them and that very soon the whole train circle of borrowing will come to a halt because common sense says you cannot go on borrowing with government instrument to sustain the economy ; today the chickens are comming home to roast ; international banks will not lend and the last two lenders of last resort the IMF and The World Bank are just not prepared to keep on lending monies to this Jon Mahama whilst he goes on cars tops to dole out cash to people on the street ;WHAT A PRESIDENT !!!!!!!! I hope the IMF are also wtiness to the folly of Jon Mahama and the NDC ;NEXT TIME BE CAREFUL WHO LEND MONEY TO IMF : I TOLD YOU SO SAYS DR BAWUMIA !!!!!!!!! because the futureis very DARK and not very bright ; the IMF are not FUlls !!!!!!!!
Yes,government is playing ostrich just to stage a scene that all is well with the economy.The rate at which Bonds are being floated both domestic and abroad tell a lot about the distress in the economy.The country needs to borrow to service debts outside because revenue mobilization is not encouraging.Some ministries are being denied their budget allocations because of shortage of funds yet Seth says all is well.