Accra, Ghana, May 15, 2020//-Ghana’s total public debt stock has risen by GHC7.7 billion from February 2020 to March 2020, according to the latest Bank of Ghana Summary of Economic and Financial Data.
The country’s debt jumped to GHC236.1 billion in March 2020 from GHC228.4 billion in February 2020. This brings Ghana’s debt-to-GDP to 59.3%.
Out of the current debt stock of GHC236.1 billion in March 2020, the domestic debt component is GHC111.3 billion as against GHC107.2 billion in February.
While the external debt component stood at GHC22.9 billion in March 2020 and GHC 22.9 billion in February 2020.
“One fact is clear; this government has borrowed heavily, the highest in the history of Ghana. “The result is we have a high national debt”, Dr E.K.Hayford, Executive Director of Caucus for Democratic Governance, Ghana (CDG—Gh), said.
Just two months ago, Moody’s, a leading global rating agency had predicted that Ghana’s debt could hit 70 percent of its Gross Domestic Product (GDP) this year.
“The country’s debt projections include an assumption that these contingent liabilities add an additional 2% of GDP annually, implying a further increase in the debt ratio to close to 70% of GDP in 2020 from 64% in 2019”, Moody’s stated in its recent release.
According to Bank of Ghana’s December summary of financial and economic data, Ghana ended 2019 with a total debt stock of GH¢218 billion, pushing the country’s Debt-to-GDP Ratio at 63 percent.
If the $3 billion Eurobond loan and others are added to the debt stock, it will further worsen the country debt sustainability position.
Ghana recently received $1 billion from the IMF under its RCF to enable it deal with the COVID-19 pandemic shocks.
The disbursement according to the IMF would help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.
The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure.
This has resulted in large government and external financing needs. The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The IMF continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support as needed.
African Eye Report
