Increasing public debt in Ghana has been a major concern to the nation. There are
several factors that influence the public debt which includes the fiscal balance, that
is either a deficit or a surplus. This study investigated the influence of fiscal balance
on total public debt. The results reveal that fiscal deficit increases total debt and
domestic debt while surpluses lead to an increase in the external debt though the
long run relationship between fiscal deficit and external debt is not significant.
Other variables that were included in the model are foreign direct investment, GDP
growth rate, gross fixed capital formation, inflation at consumer price index, trade
openness, current account balance, executive constraint, interest payment,
population growth rate and democratization. It is recommended that since fiscal
deficit is detrimental to both the total debt and domestic debt, the government must
consider reducing its expenditure through fiscal adjustments. Also, the government
agencies that are in charge of the revenue must consider the broadening of their tax
base in order to reduce the deficits. If the domestic revenue increases, the deficit
would reduce as well and thereby reducing the public debt.
African Research, R (2021). THE EFFECT OF FISCAL BALANCE ON PUBLIC DEBT IN GHANA. Afribary.com: Retrieved April 11, 2021, from https://afribary.com/works/the-effect-of-fiscal-balance-on-public-debt-in-ghana
Resources, African Research. "THE EFFECT OF FISCAL BALANCE ON PUBLIC DEBT IN GHANA" Afribary.com. Afribary.com, 02 Apr. 2021, https://afribary.com/works/the-effect-of-fiscal-balance-on-public-debt-in-ghana . Accessed 11 Apr. 2021.
Resources, African Research. "THE EFFECT OF FISCAL BALANCE ON PUBLIC DEBT IN GHANA". Afribary.com, Afribary.com, 02 Apr. 2021. Web. 11 Apr. 2021. < https://afribary.com/works/the-effect-of-fiscal-balance-on-public-debt-in-ghana >.
Resources, African Research. "THE EFFECT OF FISCAL BALANCE ON PUBLIC DEBT IN GHANA" Afribary.com (2021). Accessed April 11, 2021. https://afribary.com/works/the-effect-of-fiscal-balance-on-public-debt-in-ghana