The reality of the state of Ghana’s public finances today is “quite stark,” President Nana Akufo-Addo has told parliament in his maiden state of the nation address on Tuesday, 21 February.

“Ghana’s debt stock now stands at 74% of GDP, after all the previous denials to the contrary,” Nana Akufo-Addo said adding: “As of the beginning of 2009, Ghana’s total debt stock was GH¢9.5 billion. By the end of 2016, the debt had ballooned to GH¢122billion.”

He said the interest costs on this debt has also increased and will amount to an estimated GH¢14.1 billion in 2017.

“In fact, 92% of Ghana’s total debt stock was incurred in the last eight years under the previous government,” he said.

Nana Akufo-Addo said total projected expenditure for 2016 was GH¢43.9 billion (26% of GDP) but actual expenditure amounted to GH¢50.3 billion (30.2% of GDP). “It appears, from what we are finding out, that some GH¢7billion of arrears and outstanding payments circumvented public financial management system,” while “the total revenue target for our country was GH¢37.9 billion (22.7% of GDP) but the actual revenue came in at GH¢33.2 billion (19.9% of GDP).”

He said the combination of higher expenditures and lower revenues than projected resulted in a significant increase in the budget deficit for 2016. “Fiscal indiscipline, once again, reared its head in the 2016 election year.”

“In fact, virtually all the targets under the IMF programme, as of December 2016, have been missed. The IMF programme negotiated was ostensibly to restore fiscal discipline, debt sustainability and increase economic growth. It should be recalled that, at the time Ghana entered into the IMF programme to restore fiscal discipline, the fiscal deficit was 10.2% of GDP. It is very clear, therefore, that the Mahama government did not achieve the objectives set out in the programme.”