Government is expected to borrow about 3.2 billion cedis from the domestic market in December, 2014.
This is expected to be one of the highest amounts borrowed this year.
The last time government borrowed a similar amount was in September,2014.
Last month government is reported to have borrowed about 700million less from the domestic market.
This was about 2.5billion cedis.
The latest development could have some dire consequences on Ghana, at a time when debt levels are above internationally accepted manageable levels.
According to the bank of Ghana, 850milllion will be raised through 91 day Treasury bills and the same amount from the issue of 182 day T-bills.
750 million cedis will also be raised through the 1 year notes and extra 750million through 2 year notes.
Already interest rates on government bills are significantly high.
Interest on the 91 day T-bill is a little below 26 percent, while 182 day T bill attracts a little above 26 percent.
The 1 year note is however at 22.5percent and the 2 year note at 23 percent.
Some analysts have even predicted interest on T-bills could rise to as high as 29 percent to 30 percent in 2015.
Other stakeholders have expressed worry about the hike in rates because government is competing with the private sector for funds hence denying them access to funds.
Banks usually prefer to lend to government rather than to the private sector, because government can easily repay, but the average SME is assumed to be more likely to default in repayment.
It is unlikely interest rates on commercial loans could drop as some campaigners are pushing for.
At current interest rates, government will pay an interest of about 681million cedis on bills issued in December alone.
The interest is about 21 percent of the 3.2billion cedis borrowed.
Ghana’s public debt has already hit the reds with a debt of 21.7billion dollars measuring about 61 percent of GDP as at the end of September.
The domestic component is about 41percent.
International rating agency Fitch is projecting government’s debt will rise to 62.8 by the end of this year and 65.6percent next year.
By: Anim Kwaku Boadu/citifmonline.com/Ghana