The Minister for Information, Mr. Kojo Oppong Nkrumah, has stated that loans contracted by the government were used to offset existing ones inherited by the New Patriotic Party administration.
He said contrary to allegations by the previous administration that the current government had borrowed excessively without any feasible developmental projects, the borrowings were used in the country's interest.
According to him, the government contracted commercial loans to finance old loans and so the national debt would reduce when the required payments were made.
Speaking at a media briefing in Accra, the Minister said growth in national debt did not imply that the government had borrowed excessively.
"The nominal debt of a country can rise because of the disbursement of loan facilities acquired by previous governments, that is, every dollar payment made for a previously acquired loan would add to the national debate," he explained.
Mr. Nkrumah indicated that over 50 percent of the national debt was foreign debt, therefore, a rise in the exchange rate (depreciation of the Ghana Cedi) would also increase the nominal national debt.
The Minister noted that the government had to borrow GH¢120 million to bail out financial institutions during the financial reforms which also added to the national debt. He added that the debt to the Gross Domestic Product (GDP) had reduced from 51.2 percent in 2014, it increased to 55.6 percent in 2015 and it further increased to 56.8 percent in 2016.
In 2017, under this government, the ratio reduced to 55.7 percent, it only increased to 57.8 percent due to the financial sector reforms and has since dropped to 56.8 percent in the first quarter of 2019.