23 Nov Ghana Debt stock hit record high
By Enoch Adjei
Dateline Africa News Correspondent
The Public sector debt stock of Ghana has hit a high reach of ¢273.8 billion Ghana Cedis, which is about 71% of the country’s Gross Domestic Product (GDP) in September, according to a November 2020 Summary of Financial and Economic Data by the Bank of Ghana. This is equivalent to $48 billion US Dollars.
The country accumulated an additional ¢10.7 billion Ghana Cedis to it’s public debt stock between July and September 2020.
As the rising debt becomes worrying in the country one cannot ignore the impact of Covid-19 which led the nation to borrow extra to finance the budget and also support industries and enterprises both small and medium scales who were highly impacted by the pandemic.
In the absence of Covid-19, Ghana’s debt wouldn’t have reached the current levels. The effect of Covid-19 affected not only Ghana but some advanced economies who also had no option than to borrow from the International Monetary Fund (IMF) and World Bank to Stabilize their economies.
According to the data, the external component of the debt stood at ¢138.5 billion Ghana Cedis ($24.3 billion US dollars), about 35.9% of the country’s GDP.
The domestic component was however estimated at ¢135.3 billion Ghana Cedis, about 35.1% of the GDP
However the financial sector resolution bond of the country stood at ¢15.4 billion Ghana Cedis, about 4.0% of GDP.
The World Bank Country Director for Ghana, Piere Frank Laporte says that the nation isn’t borrowing too much to be criticized that it is moving into a debt distress country category.
Meanwhile the International Monetary Fund earlier forecast a 76.7% of debt – to – GDP ratio for the country this year.
But it however said in its Sub Sahara Africa Regional Economic Outlook report that the debt – to – GDP ratio will however drop slightly to 74.7% of GDP in 2021.
Finance Minister of the country, Mr. Ken Ofori Atta, at a recent IMF/World Bank meeting called for debt forgiveness and cancellation for vulnerable and debt distressed countries in the world.
He said the countries needed the gesture to help empower them financially to be able to protect lives and rescue their economies from the impact of the ravaging coronavirus pandemic.