Ghana ended 2022 with multilateral debts worth $7.9bn
Ghana’s multilateral debt saw contrasting trends, standing at $7.9 billion at the close of 2022, according to the Bank of Ghana’s 2022 Annual Report.
This figure marked a decline from the $9.05 billion recorded at the end of 2021, indicating efforts to address debt obligations.
However, it’s worth noting that the current debt level of $7.9 billion remains higher than the $6.3 billion recorded at the end of 2017, reflecting a broader trajectory of growth in multilateral borrowing over the years.
The term “multilateral debts” refers to obligations owed to prominent institutions such as the International Monetary Fund (IMF), the World Bank, and the African Development Bank (AfDB).
These entities play vital roles in extending financial support and assistance to member countries like Ghana, aiding in various developmental initiatives.
Inclusive of the multilateral debts, Ghana’s total external debt reached $29.1 billion at the end of 2022, as outlined in the Bank of Ghana’s report.
The external debt landscape consists of various components, with eurobonds accounting for $13.1 billion, commercial creditors at $4.4 billion, export credit agencies at $915 million, bilateral creditors at $1.2 billion, and other concessional creditors at $1.5 billion.
Ghana’s public debt increased by a fifth in just four months, driven partly by the inclusion of short-term loans from the central bank to the state.
Public debt, which excludes state-owned enterprises obligations, rose to 569.3 billion cedis ($49.7 billion) at the end of April, the Bank of Ghana said on its website. The figure was adjusted to include the central bank’s overdraft to the government, which was securitized in December 2022. Domestic debt currently stands at GHS 247.9 billion ($22.5bn).
Maintaining a careful balance in external borrowing is paramount for Ghana’s fiscal stability and long-term economic growth.
Prudent debt management practices will be crucial to ensure that borrowed funds are effectively utilized for productive ventures and developmental projects, while also mitigating potential risks associated with high debt levels.
As Ghana navigates its debt landscape, the government and relevant authorities are expected to implement sound financial strategies and policies to safeguard the nation’s economic wellbeing.
Effective debt management, coupled with strategic investments and reforms, will be essential to promote sustainable growth and steer the country towards a prosperous future.
