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| Ghana''s debt ratios fall |
10/31/2007 |
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A Deputy Governor of the Central Bank Dr. Mahamudu Bawumia has revealed the country’s debt sustainability indicators have fallen over the last 3 years (2003 – 2006).
Speaking at a press conference in Accra to announce the expected benefits from the $750m Ghana bond, Dr. Bawumia assured the nation that there will be no relapse into an unstable debt dynamics which could affect the maximization of the benefits from sovereign bond.
The debt to GDP ratio fell from 72% in 2003 to 18% in 2006. Debt to export ratio also fell from 176% in 2003 to 42% in 2006. In addition, debt to revenue ratios went down from 300% in 2003 to 65% in 2006.
According to Dr. Bawumia, the prudence in these three core areas means the current threshold for distress is not worrisome because the current debt ratios are below the threshold of distress.
The threshold of distress for debt to GDP ratio is 50%, debt to export is 58% and the threshold of distress for debt to revenue ratio is 300%.
In all Dr. Bawumia noted that with these current debt ratios, Ghana stands a good chance to use the bond successfully to maximize returns on the bond rather than creating debt for itself.
Source:
Samuel COLEMAN
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