The Bank of Ghana Headquaters
• Interest payments for Q2 2021 was GH¢6.758 billion
• Government expenditure keeps rising
• The main drivers for this are compensation of employees, cost goods and services and interest payments
The Bank of Ghana has stated interest payment spent by the Government of Ghana in was the second quarter of 2021 was GH¢6.758 billion, recording a 25.1 below of the programmed target.
According to the latest quarterly economic bulletin of the central bank, domestic interest however accounted for 76.7 percent of the total interest payment which registered a year-on-year growth of 33.7 percent
For external interest payments, the government accounted for the remainder of 23.3% as well as recorded a year-on-year decline of 11.0 percent.
On the expenditure and net lending front, the government in the second quarters of 2021 recorded a total of GH¢24.87 billion which is about 5.7 percent of Gross Domestic Product, compared with a programmed target of GH¢26.86 billion (6.2% of GDP).
The report however explained that the main drivers of government’s expenditure was attributed to compensation of employees, cost goods and services and interest payments. These drivers on constituted about 71 percent of total payments made in the period under review.
Meanwhile, there still remains some concerns over the government’s excessive borrowing on the domestic market which has been highlighted by the World Bank and International Monetary Fund.
This according to some economists could lead to the crowding out of the private sector in their quest to access funds for development.