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Government public debts increase by 23 per cent-Finance Minister
Posted on: 05-Mar-2013         Source: GNA
Mr Seth Terkper, the Minister of Finance and Economic Planning, said the country’s public debt including government guaranteed debt has increased by 23 per cent from US$15,350.08 million in 2011 to US$18,832.77 million by end of December 2012.

Mr Terkper said these figures represented 40.8 per cent of Gross Domestic Product (GDP) in 2011 and 49.4 per cent of GDP by end December 2012.

“In terms of debt type, domestic debt grew by 30 per cent (between 2011 and 2012) to constitute 53 per cent of the total public debt, compared to 47 per cent for external debt “he added.

Mr Terkper who delivered the financial statement of the country for 2013 on Tuesday in Accra said the increased public debt was largely due to the issuance of longer dated domestic debt instruments of 3-year and 5-year bond, and increase net debt flows from non-concessional loans for key infrastructure projects.

He said government in 2012 raised loans of about US$2,286.24 million of which US$1,089.75million was concessional and US$1,196.49million non-concessional to implement various infrastructural in an effort to bridge the gap in development.

Mr Terkper explained that of the total borrowings in 2012, 26 per cent was committed to the Water Resource Works and Housing sector, 25 per cent to Energy, 13 per cent to Health, 12 per cent to Agriculture and the remaining 24 per cent committed to other sectors of the economy.

He said works are far advance on the Western Corridor Gas Infrastructure Project under CDB of China, the Bui Hydro Dam Project by EXIM China is expected to be completed this year, the water projects by EXIM Turkey and Korea are expected to commence this year, as well as the Tamale Airport Project, the Flyover Project and some portion of the Eastern Corridor Road Project supported by the Brazilian PROEX facility.

Mr Terkper stressed that the Ministry is working with the beneficiary of Ministries, Department and Agencies to finalize relevant project preparation documents to ensure the timely completion of these projects to reduce the infrastructural deficit in critical areas of the economy.

He said headline inflation went up marginally from 8.6 per cent in 2011 to 8.8 per cent in 2012, and that although the end year inflation missed the target of 8.5 per cent, it remained within the target band of 8.5±2 per cent.

“Food inflation peaked at 5.5 per cent in July 2012 but declined to end the year at 3.9 per cent. Partly reflecting the exchange rate pass-through, non-food inflation also increased to 12.5 per cent in August 2012 and steadily declined to 11.6 per cent in December 2012” he added.