The World Bank has forecast that Ghana’s debt profile will continue to worsen up to 2023 when the debt-to-GDP ratio hits a scary 81.1%.
What this means is that the country’s debt will be almost equal to all the income that Ghana makes by 2023.
According to the World Bank, the climb will then slow down a little.
Already, as of the end of December 2020, public debt stood at a whopping GH¢291.61 billion, representing 76.1 percent of GDP.
The World Bank points out that the COVID-19 pandemic does not help matters for the country.
“The crisis has already led to the suspension of the fiscal rule and substantially driven up financing needs. To meet these exceptional financing needs and maintain macroeconomic stability, the government will need to resume fiscal consolidation efforts as soon as possible, with particular focus on reforms to increase public revenue,” said Pierre Laporte, Country Director of the World Bank.
“Authorities should consider reforms to widen the tax base, strengthen tax administration, reduce tax exemptions, plug revenue loopholes and leakages, and combat tax evasion.”
Already, the 2021 Budget has announced austerity measures, with the introduction of a slew of new levies and taxes by government in an attempt to salvage the situation.
Even so, Ghc113billion that the government has budgeted for 2021, is still not yet a bird in hand with the revenue calculations amounting to some Ghc72billion.
Despite this conundrum, however, the Akufo-Addo Jubilee House is asking for Ghc1.52billion extra as budgetary allocation for Jubilee House’s spending pleasure.