Accra, Dec.18, GNA - Dr Nii Noi Ashong, Minister of State at the Ministry of Finance and Economic Planning, on Thursday decried the rapidly growing domestic debt, saying it was now an excruciating burden on governments in West Africa.

He said the situation had assumed its current dimensions because issues of domestic debt had not received due attention from the international community.

"Rather, it has preoccupied itself with seeking solutions and strategies to the external debt problem with little attention paid to domestic component with all its adverse effects on growth." Dr Ashong was speaking at the opening of an Executive Forum for Minister of Finance and Governors of Central Banks in West Africa in Accra.

The objective of the Forum is to exchange ideas on debt management strategies and what means to adopt to reduce them with the same fervour that was attached to reducing external debt.

Dr Ashong attributed the unsustainable trends of domestic debt in the Sub-Region to factors in the macro-economy, most notably persistent fiscal deficits that were increasingly financed from domestic sources. He called for a sustainable capacity in debt management, which he noted, should be a continuous process "if we must avoid the experience of some countries, which attained sustainable debt thresholds under the HIPC Initiative, but have since relapsed into unsustainable levels due to a myriad of reasons".

Dr Ashong said though some achievements had been recorded in the Sub-Region there was the need for continued cooperation from all stakeholders involved in the development process in the Sub-Region. Ghana's domestic debt stock climbed from 53.96 billion or 1.0 per cent of GDP in 1990 to 875.59 billion or 21 per cent of GDP in 1995. "From this level it ballooned to 10,194.7 billion cedis or 26.8 per cent of GDP and then to 29.6 per cent in 2002. It is projected to decline marginally to 28.3 per cent by the close of 2003.

In The Gambia, available information said that domestic debt stock stood at 2,512.05 Dalasis or 43 per cent of GDP at the end of December 2001, having risen by 171 per cent from its 1995 levels.

The situation is not different in Sierra Leone where domestic debt stock rose from 25 billion Leone or 10 per cent of GDP at the end of 1993, to 39 billion Leone or 5 per cent of GDP in 1995 before climbing up to 321.4 billion Leone or 21.6 per cent of GDP in 2001.

In Nigeria, domestic debt increased in absolute terms but declined as a proportion of GDP between 1990 and 2001. By 2001, it was at about 19 per cent of GDP.

Mr Chris Itsede, Director-General of the West African Institute for Financial and Economic Management (WAIFEM), told the Ghana News Agency that the Forum had become necessary because of the mounting domestic debt in the various countries in the Sub-Region.

"Having come this far it is just right we sat down to examine the problems that led to this situation and address them. It will not be easy but I believe that we can start a move now."