Public Debt Reaches GHS 761.1 Billion as Finance Minister Attributes Hike to Cedi Depreciation
Ghana’s Finance Minister, Dr. Mohammed Amin Adam, has disclosed that the nation’s public debt has reached GHS 761.1 billion ($51.1 billion) as of July 31, 2024, reflecting an increase from GHS 587.7 billion ($53.5 billion) earlier in the year.
Speaking at the Ministry of Finance’s Monthly Economic Update on Thursday, Dr. Amin Adam attributed the rise in debt in cedi terms to the local currency’s depreciation.
“The increase in cedi terms and the decrease in US dollars is attributed to a combination of factors, including cedi depreciation, disbursements from multilateral institutions, and domestic financing of the budget,” he quipped.
Meanwhile, the Cedi has breached the GHS 16 threshold against the US Dollar on the currency retail market, underscoring the continued depreciation of the local currency amidst mounting economic challenges.
Forex bureaux and banks in the capital, Accra, last week revealed that the dollar was being traded at rates between GHS 15.95 and GHS 16.20.
The depreciation of the cedi follows the International Monetary Fund’s (IMF) decision to lift restrictions on dollar auctions conducted by the Bank of Ghana, a move made possible by a notable increase in the nation’s foreign reserves under the Fund’s $3 billion economic recovery programme.
According to the Bank of Ghana’s July 2024 Summary of Financial and Economic Data, the Cedi has depreciated by approximately 19.6% against the dollar on the interbank market this year, with the decline in the retail market slightly steeper at 21%.
Per recent data, the cedi lost 0.31% against the dollar, 1.82% against the pound, and 3.76% to the euro on the retail market. It sold at GHS 16.28 to a dollar on Monday, August 26, 2024, taking its year-to-date loss to 24.57%.
Market analysts noted that market sentiments and speculative behavior are key factors driving the depreciation of the cedi.
