25.02.2005 Business & Finance

BUDGET: Ghana's debts $US6.2 billion

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Total Debt: US$5.5bn (2000); $6.9bn (2001); $7.2bn (2002 est.); 6.1bn (2004) Accra, Feb. 24, GNA - Ghana's total external debt as at end of 2004 was 6.2 billion dollars for medium and long-term debt for government, government guaranteed and non-government guaranteed debt (institutions that government has more than fifty per cent}. The Minister of Finance and Economic Planning Mr Kwadwo Baah-Wiredu said in the 2005 Budget Statement that of the total debt stock for the medium and long-term including International Monetary Fund (IMF), 89 per cent was owed to multilateral institutions, notably World Bank, eight per cent to bilateral creditors (Paris Club and Non-Paris Club) and three per cent to commercial creditors. "The change in the percentage composition of debt by creditor category was as a result of the Paris Club's Debt cancellation when Ghana reached Highly Indebted Poor Countries (HIPC) Completion Point." Mr Baah-Wiredu said total external inflows into the economy stood at 718.62 million dollars for 2004. This was made up of loan inflows of 403.69 million dollars and grant inflows of 332.79 million dollars. Project loans and grants inflows of 517.78 dollars million accounted for about 72.1 per cent of the total external inflows. Of this, project loans accounted for 280.5 million dollars, with project grants recording 237.29 million dollars. Total programme inflows to support the budget was about 361.66 million dollars made up of loan disbursements of 115.09 million dollars and grant disbursements of 246.57 million dollars. Mr Baah-Wiredu said projected debt service payments for the year 2004 was 440.8 million dollars. This was made up of 321.8 million dollars for principal repayments and 119.0 million dollars for interest and other charges. Actual debt service payment for 2004 was 154.1 million dollars. Thus in 2004, government made total debt service savings of about 286.7 million dollars through debt relief under the HIPC Initiative. The Minister said in 2004, 26 new concessional loans, mainly from multilateral institutions were contracted to support projects that were directly linked to the Ghana Poverty Reduction Strategy (GPRS). The main sectors that benefited from the new loans included roads transport, health, education, water and energy. The total amount committed was 587.71 million dollars.
Mr Baah-Wiredu said about 1,508.0 billion cedis was expected to be lodged into the HIPC account for 2004. As at end of December 2004, Government transferred about 1,946.5 billion cedis (including 439.5 billion cedis of 2003 relief) into the HIPC Account.
On disbursement from the HIPC Account, the Minister said last year, Government approved a total amount of 1,975.77 billion cedis from the HIPC Account to support poverty-related spending by Ministries, Departments and Agencies (MDAs) and the reduction of domestic interest payments.
Out of the total amount approved for year 2004; 301.4 billion cedis was disbursed for domestic debt reduction with the remaining amount going to the MDAs, Metropolitan, Municipal and District Assemblies. Mr Baah-Wiredu said the Government's domestic debt stock (including the Bank of Ghana's non-interest bearing revaluation stock of 3.1 trillion cedis) as at December 31, 2004 amounted to 16,897.2 billion cedis. Short-term instruments accounted for 41.4 per cent of the total debt, while medium-term and long-term instrument accounted for 32.7 per cent and 25.9 per cent, respectively.

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