State enterprises owed over two billion dalasis to the Social Security and Housing Finance Cooperation, says Mambury Njie, minister of Finance and Economic Affairs.

Njie made this disclosure on Thursday at the National Assembly in response to a question raised by the Member for Sere Kunda West, Madi MK Ceesay. The Finance and Economic Affairs minister was at the Assembly to present the draft annual report on state’s debt management operations for parliamentary consideration and adoption.

The Finance minister revealed that the Public and Publicly Guaranteed (PPG) debt stood at 65.9 billion dalasi, of which external debt constituted 54.5 per cent and the remaining 45.5 per cent as domestic debt.  

“The nominal debt as percentage of GDP decreased from 124 per cent as at end 2017 to 87 per cent as at end period 2018. Present Value (PV) of debt to GDP also decreased from 106 per cent in 2017, to 74.4 per cent in 2018. The reduction in the aforesaid ratios is as a result of the recent GDP rebasing.”

He said the Medium Term Debt Management Strategy (MTDS) for the period 2019-2022 was “the strategic direction of Government’s intent on borrowing and debt management over the medium term, to achieve the objective of ensuring that financing needs were met at the lower possible cost and consistent with a prudent degree of risk.”

Njie added that in 2018 the government was able to introduce longer dated 3-year and 5-year Bond instruments in the domestic debt market and successfully separated domestic debt instruments from monetary policy ones.

“The MTDS for the period 2019-2022 represents a robust framework for prudent debt management, because it provides a systematic approach to decision making on the appropriate composition of external and domestic borrowing to finance the 2019 budget deficit.”  

He said that meeting Government’s finance needs on a timely basis at the lowest possible cost, lengthening the maturity of the domestic debt by increasing the share of the longer dated domestic debt instrument in the portfolio during the medium term, as objectives of the MTDS.

“The Medium Term Debt Management Strategy aims to maximize external concessional financing in order to reduce borrowing cost, continuing the issuance of the 3 and 5 year bonds to develop and deepen the domestic debt market and extend the maturity of domestic debt by substituting a greater proportion of the short term debt with the longer term, thereby refinancing risks of the portfolio.”