Ghana’s public debt sees sharp rise to GH¢658.6bn
By Isaac. Aidoo
Ghana’s public debt has reached GH¢658.6 billion, according to the latest economic and financial data published by the Bank of Ghana (BoG).
According to the data, the country’s debt stood at GH¢611.2 billion at the end of 2023, rose to GH¢626 billion in January 2024 and further increased to GH¢658.6 billion by February 2024.
The sharp increase elevates the nation’s debt-to-GDP ratio to 62.7%, up from GH¢611.2 billion at the close of 2023.
The escalation in the public debt stock was driven primarily by the depreciation of the cedi and a significant rise in government borrowing on the domestic market.
The central bank’s report details that the domestic debt increased by GH¢18.5 billion, while external debt surged by GH¢28.9 billion, largely attributable to the weakening cedi.
As of February 2024, the external component of the total public debt stood at $30.6 billion (GH¢350.3 billion), which represents 36.1% of GDP.
The domestic debt, on the other hand, was recorded at GH¢278.7 billion, accounting for another 36.1% of GDP.
Ghana requested assistance from the International Monetary Fund (IMF), to get its macroeconomic situation back on track, keep its finances stable, and shield the most vulnerable members of its society.
The bailout programme has necessitated a debt restructuring exercise both domestically and externally .
The country has temporarily halted debt service payments on some of its foreign debt, including Eurobonds, commercial term loans, and most bilateral debts.
The Executive Board of the IMF is set to sit on Ghana’s second review for consideration and approval in June to unlock the third tranche of US$360 million, bringing the total disbursements under the programme to US$1.56 billion.
The Ministry of Finance has been touting Ghana’s impressive performance under the programme , noting that the positive results of the first and second reviews of the implementation of the IMF-supported Programme testify that “we are achieving the Programme’s objective of restoring macroeconomic stability and debt sustainability, building resilience through the implementation of strong and wide-ranging structural reforms, and laying the foundations for stronger and more inclusive growth, while protecting the poor and vulnerable. We are now seeing signs of macroeconomic stability and economic recovery.”
