IMF Projects Ghana’s Debt-to-GDP Ratio to Reach 83% by End of 2024; Decline to 69.7% by 2029
The International Monetary Fund (IMF) has projected that Ghana’s debt-to-GDP ratio will rise to 83% by the close of 2024, according to the Fund’s October 2024 Fiscal Monitor Report, released during its annual meetings in Washington DC. This forecast underscores the ongoing fiscal challenges facing the West African economy, which has been grappling with a high debt burden exacerbated by currency depreciation and inflationary pressures.
However, the IMF anticipates a gradual improvement in Ghana’s debt profile over the coming years. The Fund forecasts that the debt-to-GDP ratio will steadily decline, reaching 69.7% by 2029, contingent upon sustained fiscal discipline and structural reforms. The projected reduction aligns with government efforts to consolidate public finances, especially in the aftermath of a comprehensive debt exchange program.
Ghana’s debt stock currently stands at over GHS 760 billion, representing about 75% of GDP. The government has set an ambitious target to reduce this to 50% by 2028. This plan hinges on stabilizing exchange rate volatility and reining in fiscal deficits. The completion of the debt restructuring program, which has involved renegotiating terms with both domestic and international creditors, is seen as a critical step towards achieving this goal.
Meanwhile, the IMF’s projection of 3.1% economic growth for Ghana in 2024 remains unchanged, suggesting cautious optimism for the country’s medium-term prospects. This growth forecast aligns with the government’s own expectations and reflects progress made in curbing inflation and restoring economic stability after a period of significant volatility.
For Ghana, the road to fiscal sustainability remains complex with external shocks such as volatile commodity prices and global economic headwinds continuing to pose significant risks. Nonetheless, the IMF’s outlook suggests that with disciplined policy implementation, the country could gradually lower its debt burden and regain fiscal stability over the medium term.
