The government of Ghana spent GH¢6.40bn on interest payments in the first quarter of 2020.
This represented 1.7% of Gross Domestic Product (GDP) and in line with the envisioned target of GH¢6.42 billion.
According to the Bank of Ghana, total interest payments constituted almost 64% of domestic revenue, undermining fiscal flexibility.
While domestic interest payments outturn was close to the proposed target, external interest payments were somewhat above the planned target due to additional payments not factored in the programme targets, it said.
Together with wages and salaries, they accounted for over 120% of domestic revenue, suggesting a lack of fiscal space and inherent rigidities in the budget execution.
Wages and salaries amounted to GH¢6.50 billion (1.7% of GDP), above the envisioned target of GH¢5.94 billion (1.5% of GDP).
The situation means that government depends on grants and other sources of funds to finance capital projects, raising concerns going forward.
In 2020, the government is expected to spend GH¢23 billion on interest payments but that may not be so because of the coronavirus pandemic.
Some multilateral institutions and sovereign nations that support the government budget may cut loan repayment schedule or cancel some debts owed them.
Source: Class FM
Gov’t To Borrow GH¢17.8bn In 3 Months
The government of Ghana is seeking to borrow GH¢17.8 billion between May and August 2020.
According to the Issuance Calendar, GH¢15.8 billion is to rollover or settle maturities and the remaining GH¢2.03 billion is a fresh issuance to finance government projects.
The 91-Day Treasury bill dominates the issuance calendar with about GH¢8.9 billion expected to be raised.
A total of GH¢1.85 billion and GH¢1.75 billion are expected to be raised from the issuance of the 1-Year Note and 182-Day Treasury bill.
7-Year, 10-Year, and 20-Year bonds will also be issued during the three months.
GHS1 billion, GH¢800 million and GH¢287.87 million are expected to be issued in July and August 2020, respectively.
Per the calendar, the government said it aims to build benchmark bonds through the issuance of the instruments.
The 91-day and 182-day bonds will be issued weekly while the 364-day bill will be issued bi-weekly.
Twos-year up to 10-year securities will be issued through the book-building method.
The issuance of the 20-year bond as a shelf offering will be re-opened based on investors request and on market conditions.
The government said: “It is our expectation that this 2020 June to August Calendar meets the requirements of market participants. We assure all stakeholders and the general public that we continue to strive for greater predictability and transparency in the domestic bond market.”
Ghana’s total public debt increased by US$300 million in March 2020 to US$43.4 billion, the March 2020 Bank of Ghana Summary of Economic and Financial Data revealed.
The debt was more than half the total size of the country’s economy.
In cedi terms, the nation’s debt jumped from GH¢228.4 billion in February 2020 to GH¢236.1 billion in March 2020, about 59.3% of Gross Domestic Product.
The external debt component was US$22.9 billion (GH¢124.8 billion), representing 31.4% of the total debt.
The domestic debt component was GH¢111.3 billion, representing 28% of GDP.
Interest payments are expected to hit GH¢23 billion by the end of December 2020.
Source: Class FM
Bawumia to launch one-stop online portal for payment transactions
Government is expected to launch a transformational, one-stop online portal; Ghana.Gov to support digital transactions.
According to a tweet sent out by the Ministry of Information on June 6, 2020, the Ghana.Gov portal will serve as a National Digital Payment Platform to enhance government’s digitisation agenda.
Vice President Dr. Mahamudu Bawumia is scheduled to formally launch the platform at a ceremony in Accra on Monday June 8 2020.
Commenting in a video post ahead of the launch, Information Minister, Kojo Oppong Nkrumah said the “platform comes as additional layer to what the Akufo-Addo led administration has been doing to digitise the economy.”
“The Ghana.Gov will provide a single point of access to all services of Ministries, departments and agencies of government and it will ensure that anybody who needs to make single payments can that do through the portal without having to interface with several people,” he added.
Explaining the benefits of the platform, the Information Minister said it will improve government’s revenue collection, help save more on its expenditure as well as aid government in the fight against corruption.
Kojo Oppong Nkrumah added that the Vice President will use the occasion to reiterate government’s other efforts in the digitisation space.
Vice President @MBawumia to launch National Digital Payment Platform to enhance government digitization agenda.
— Ministry of Information (@moigovgh) June 6, 2020
Vice President, Dr. Bawumia, earlier in January this year announced the introduction of the one-stop portal; Ghana.Gov in line with government’s digitisation and economic transformation agenda.
He explained that the Ghana.Gov online portal will synchronize all business transactions with all government agencies and enterprises. It will also enable members of the public to transact business with any government agency through the Ghana.Gov platform, according to the Vice President.
UNIPASS hitches cannot make President Akufo-Addo unpopular – Freight Forwarders President
President of the Chamber of Freight forwarders and Trade (CTF), Dennis Amfo-Sefah, has stated that the current technical hitches the implementation of UNIPASS is experiencing cannot be blamed on President Nana Addo Dankwa Akufo-Addo.
He said just like any other new system, UNIPASS indeed experienced some teething challenges that it was surmounting and it was therefore not reasonable to blame it on the President.
Mr Amfo-Sefah, who was speaking to the Ghana News Agency in Accra on Friday said “I can assure you that the claims that we are angry at the President are not true; among us Freight Forwarders, there is no unhappiness towards President Akufo-Addo because we know the truth.”
“The truth is that people who feel they are losing port management contracts are simply fighting back the smooth take-over of port administration by UNI-PASS; that is the simple truth. These people feel pained about losing the contract to manage the ports and so they have decided not to cooperate.” Mr. Amfo-sefah however failed to name those behind it, saying “The people I am referring to know themselves and at the appropriate time everybody will know the real truth.”
Some Media outlets since the implementation of the UNIPASS system reported that President Akufo-Addo was becoming unpopular among importers and freight forwarders because of glitches that were bedeviling the new UNI-PASS system.
They attributed the hitches to some senior members of government, who were allegedly responsible for the happenings at the ports for introducing CUPIA Korea and its UNI-PASS system and therefore allegedly orchestrated the abrogation of the contract of GC Net and West Blue to make way for the latter.
However, Dennis Amfo-Sefah pointed out that, “Nobody among us is angry with the President or any of his appointees because we know that the mess is not the making of any of them. The arrangement had been for the old operators to slowly back out so that UNI-PASS would slowly take over. This would have led to a seamless integration.
“However, the operators of the old system disengaged rather abruptly, leading to the challenges,” Mr. Amfo-Sefah said.
According to him, “the difficult switch from the old system to the new one was the problem not President Akufo-Addo or his Ministers.”
He was however hopeful that the problems would be fixed very soon. “This is the second time that the abrupt disengagement of the old port management system to make way for the new one is causing problems. In early May, a similar disengagement grounded operations at the port for days.”
UNI-PASS is a new port clearing system that processes documents and payments through one window. It is a departure from the previous system in which ‘valuation and classification’ and ‘risk management and payment’ were handled by different entities.
The single window system is aimed at coordinating all activities at the ports on one platform to reduce time and cost in clearing and exporting goods.
The system, spearheaded by Ghana Link Services Ltd, in collaboration with Customs UNIPASS International Agency (CUPIA) of the Korean Customs Service, the designer of the system, replaces the Pre-Arrival Assessment Report (PAARS) and the Ghana Customs Management System (GCMS) jointly operated by the Customs Division, the Ghana Community Network Services (GCNet) Ltd and West Blue Consulting.
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