Ghana’s public debt increases marginally by 0.2%; now 76.4% of GDP
Ghana’s total public debt increased marginally by 0.2 percentage points between the month of June and July.
The nation’s debt stock as a percentage of Gross Domestic Product (GDP) as at the end of July per the Bank of Ghana’s (BoG) September 2021 Summary of Economic and Financial Data, stood at 76.4 percent as against the 76.2 percent recorded in the previous month – June 2021.
The new debt figure translates into some Ghs 335.9 billion ($57.9 billion).
External debt to GDP at end-July 2021 as reported by the BoG, stood at Ghs 162.5 billion ($28 billion).
The Ghs 162.5 billion external debt to GDP represents a year-on-year increment of 0.9 per cent from the end-July 2020 figure of Ghs 138 billion. This implies that foreign investors increased their participation in the country’s debt market.
Domestic debt as a percentage of GDP also increased from Ghs 125.1 billion end-July 2020 to Ghs 173.4 billion end-July 2021, marking a 6.9 percentage points increment.
Meanwhile, international sovereign credit rating agency, Fitch Ratings, has projected an end-of-year debt-to-GDP ratio of 81 percentage points for the country this year.
The projected 81 percent debt-to-GDP ratio implies an approximately 4.6 percentage points increase in the country’s total debt stock given that the country’s current debt-to-GDP ratio stands at 76.4 percent.
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According to Fitch, the end-of-year debt-to-GDP ratio of 81 percent will be inclusive of ESLA bonds amounting to 2.5 percent of GDP.
“We forecast general government (GG) debt to reach 81% of GDP in 2021, including 2.5% of GDP in bonds held through the Energy Sector Levy Act Plc., which is excluded by the government,” stated Fitch.
Fitch however, posits that despite the projected increase in the country’s total debt, Ghana still has good access to both domestic and external fiscal financing.
Also, the the International Monetary Fund (IMF) has projected Ghana’s total debt stock to hit 86.6 percent in 2025.
According to the IMF, Ghana’s debt stock is expected to continue on an elevated path reaching 81.5 percent this year, 83.2 percent in 2022, and further to 84.8 percent, 86.0 percent and 86.6 percent in 2023, 2024 and 2025 respectively.
The country’s debt stock will however, reduce by 1.1 percentage points in 2026, ending 2026 at 85.5 percent.