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Ghana�s economy, which grew by 6.7% in the first quarter of the year, is facing debt sustainability challenges, as the Mahama-led government keeps contracting more loans to undertake development projects in the country. The country�s total public sector debt stock has risen from GH�51.9 billion or 55.5%, of the Gross Domestic Product (GDP) as at December 2013 to the current figure of GH�65.7 billion (57.3% of GDP). The domestic debt component as at end-of-August 2014 was GH�28.5 billion (43.3% ), while the external debt stood at US$11.9 billion (56.7% of the overall debt ), according to latest Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) report. Commenting on the issue, a renowned Economics Consultant, Kwame Essilfie Adjaye warned: �When the debt level is this high it creates problems of repayment for any country. So we have a very big challenge now, of how to repay this big national debt�. Contrary to the debt figure put up by the Central Bank, the International Monetary Fund (IMF) says Ghana�s public debt has even crossed the 60% mark level, which will make it difficult for government to service these debts on time. In its latest �Fiscal Monitor� report, it revealed that Ghana�s public debt would hit a little over 70% of the country�s total economic output by 2015, warning that when the country�s debt exceeds 60% of its total economic value, economic stability would be threatened. The UK-based leading provider of credit ratings, Fitch Ratings noted Debt servicing costs have also risen steeply, to an estimated 6% of GDP in 2014 from 3.3% of GDP in 2011, adding to the intractable nature of Ghana�s fiscal position, the credit agency added in its latest statement on the country. The Fitch Ratings warned: �external financing conditions will remain extremely tight over the coming months. Foreigners held 21% of domestic debt at end of year-2013, down from 26% in 2012. �Further stress might arise from Ghanaian banks repaying dollar loans taken out during 2013, and there are potential risks of further dollar outflows if the Bank of Ghana (BoG) were unable to roll over swap facilities and loans,� Fitch noted. Addressing the media in Accra on Wednesday, the BoG indicated that preliminary fiscal data for January to September 2014, indicate that both revenue and expenditure were below their respective targets for the period. The shortfall in revenue was, however, lower than the shortfall in expenditure. Total revenue and grants realized was GH�17.7 billion (15.4% of GDP) falling short of the target of GH�18.4 billion (16% of GDP). The shortfall in government receipts was partly due to lower import volumes, decline in commodity prices, particularly gold on the world market, and the slowdown in economic activity arising from energy challenges. Total expenditure, including payments made for the clearance of arrears and outstanding commitments was GH�24.4 billion (21.3% of GDP) compared with the budgeted ceiling of GH�25.8 billion (22.5% of GDP). Compensation of employees summed up to GH�7.6 billion against a budget target of GH�8.1 billion. Interest payments also totaled GH�4.9 billion. As a result of these developments, the overall budget balance for the review period, registered a deficit of GH�6.7 billion equivalent to 5.9 per cent of GDP, against a target of 6.4 per cent. The deficit was financed from external and domestic sources: GH�4.7 billion and GH�2 billion from external and domestic sources respectively, according to the MPC report. At the end of October 2014, gross international reserves stood at US$5.9 billion representing a build-up of US$314.2 million from the end of December 2013, sufficient to provide 3.4 months of import cover. This has since improved to US$6.6 billion as at November 7, 2014 equivalent to 3.8 months of import cover. Developments in the foreign exchange markets indicate a generally weaker domestic currency in 2014. For the first ten months of the year, the cedi cumulatively depreciated by 31.2 percent against the US dollar in the interbank market, compared to 7.4 percent in the corresponding period last year. Fitch which placed Ghana�s �B� Issuer Default Ratings (IDR) on Negative Outlook in March 2014, highlighted the deteriorating external and fiscal balances noting the increasing challenge and cost of financing the deficit. A further deterioration in external finances and an erosion of international reserves that jeopardized external financing capacity are ratings sensitivities.