Ghana’s public debt stock hit GHS218.0 in December 2019, according to the March 2020 Summary of Financial and Economic Data released by the Bank of Ghana today.
This is about 63% of Gross Domestic Product.
Out of this, external debt constituted GHS112.5 (US$20.3 billion). This represented 32.5% of GDP.
GHS105.5 was borrowed from the domestic market, representing 30.5% of GDP.
From the figures above, external debt was GHS7 billion more than domestic debt.
In December 2016, Ghana’s debt was GHS122, representing about 62% of GDP. This was based on the old economic value of the country.
However, at the end of September 2019, Ghana’s public debt had risen to about GHS208.6 billion, representing 60.3% of GDP due to the rebasing of the Ghanaian economy.
Comparatively, Ghana’s debt stood at GHS42 billion in 2012. In 2008, Ghana had borrowed about GHS9 billion.
Largely, the monies borrowed are used to repay maturing debts (interest and sometimes principal) with little going into infrastructural projects.
The arguments are that the borrowed funds are used for consumption purposes instead of capital projects.
The International Monetary Fund has also warned that Ghana has a high risk of becoming a debt-distressed country.
According to the Bretton Wood institution, the Debt Sustainability Analysis is mainly driven by debt service to revenue exceeding the threshold throughout the forecast horizon, though all other indicators also exceed their thresholds at some point over that horizon.
The World Bank had also cautioned Ghana against excessive borrowing.
World Bank Country Director Frank Laporte urged Ghana to be careful with increasing the country’s debt stock with fresh borrowings Ghana’s debt hits GHS218bn in Dec. 2019