Public debt registers GHS 14.2 billion reduction to GHS 567bn between June and September 2023
Ghana’s public debt demonstrated a marked decline of ¢14.2 billion between June and September 2023, settling at ¢567.3 billion—equivalent to $51.0 billion or approximately 66.4% of the nation’s Gross Domestic Product (GDP). The trajectory of this reduction can be attributed to the strengthening of the cedi against the dollar, particularly evident during the month of September, coupled with the suspension of interest payments to external creditors.
The November 2023 Summary of Economic and Financial Data, released by the Bank of Ghana, illustrates the debt dynamics. In June 2023, the revised debt stock stood at ¢581.5 billion, constituting approximately 68.0% of GDP. Subsequently, the figure fluctuated, reaching ¢584.0 billion ($53.0 billion) in July and ¢584.4 billion ($53.0 billion) by the end of August 2023.
External scrutiny reveals a nuanced picture, with the external component of the total public debt amounting to $29.4 billion (¢326.7 billion) in September 2023, reflecting a decrease from the $29.9 billion (¢328.6 billion) recorded in June 2023. Conversely, the domestic debt contracted to ¢240.6 billion in September 2023, constituting approximately 28.1% of GDP—a substantial decline from the ¢252.9 billion recorded in April 2023.
Regrettably, the report is silent on critical elements such as the financial sector resolution debt and other liabilities, including those associated with the energy sector.
Furthermore, the fiscal discipline of the Ghanaian government has come under scrutiny. Despite a challenging economic backdrop leading to the suspension of loan payments in December 2022, recent data indicates that fiscal operations are on track. The fiscal deficit to GDP stood at an encouraging 3.0% in August 2023, a stark improvement from the 8.3% recorded in December 2022. The primary balance, though at a deficit of 0.7% of GDP in August 2023, reflects a managed fiscal stance.
Ghana is presently engaged in negotiations with external creditors, seeking to finalize a deal that would unlock the release of the second tranche of $600 million by December 2023. The outcome of these negotiations will undoubtedly shape the trajectory of Ghana’s economic recovery and the restoration of fiscal stability in the coming months.
