Ghana's Minister of Finance, Mr. Seth Terkper has stated categorically that the country is far from going back to HIPC, despite a shooting public debt.

The stock of Ghana's public debt, which increased to GH¢43.9 billion, representing 49.5% of Gross Domestic Product (GDP) at end of August 2013, from GH¢35.1 billion in December 2012, has generated heated debate between opposition parties and managers of the Ghanaian economy.

Of this, the domestic component amounted to GH¢24 billion, compared to GH¢18.5 billion in December 2012. External debt stood at US$10.2 billion, up from US$8.8 billion in December 2012. The increase in the external debt was mainly due to the sovereign bond issue.

But Mr. Terkper insisted that the country's debt to GDP ratio is below the HIPC threshold, adding that "the Ghana's solvency ratios at end-August 2013 show that the nation's debt is sustainable with, moderate degree of debt distress". Ghana successfully issued a US$1 billion Eurobond at a coupon rate of 7.875 percent in July 2013. Out of the total amount, US$250 million has been used for the redemption of part of the Eurobond issued in 2007.

This is expected to reduce the rollover risk of refinancing the entire 2007 US$750 million Eurobond when it matures in 2017, he explained. Mr. Terkper emphasized: "The remaining US$750 million is being used to finance already approved capital projects (with priority given to self-financing projects) in the 2013 Budget and refinance maturing high interest domestic debt to reduce the cost of borrowing".

Reviewing the performance of the economy, the Minister was quick to say: "For the first eight months of the year, the value of merchandise exports were estimated at US$9.8 billion, improving by 4.1% over the overturn for the same period last year".

As a result of the decline in international prices of Ghana's major export commodities, earning from gold fell by 12.6% to US$3.4 billion, while exports of cocoa beans also declined by 21.4% to US$1.4 billion. Oil exports, however, increased by 46.9% to US$2.8 billion, as a result of increased production, Mr Terkper stressed.

He further explained: "The value of imports declined in the first eight months of the year, to US$11.6 billion in 2012. The decline came from a slowdown in both oil and non-oil imports.

"Oil imports went down by US$60.9 million to US$2.3 billion, while non-oil imports also declined by 2.4% to US$9.3 billion within the period. The trade balance for the period therefore improved to a deficit of US$1.8 billion from a deficit of US$2.5 billion in 2012".

Gross international reserves at the end of August stood at US$5.8 billion equivalent to 3.2 months of import cover, Mr. Terkper told journalists recently. Total revenue and grants for the period was GHC 11,902.8 million, equivalent of 13.4% of GDP, against a target of GHC 14,175.0 million, equivalent to 16.0% of GDP. In nominal terms, the provisional out-turn was 13.1% higher than the outturn for the same period in 2012.

The shortfall in total revenue and grants, he attributed was mainly as a result of low disbursement of grants from our development partners and partly due to lower than anticipated domestic revenue collection by Ghana Revenue Authority (GRA).