In spite of progress made in economic growth, the trajectory of Ghana’s debt stock level, over the years, still remains a growing area of concern, a World Bank Chief Economist for the Africa region has said.
High debt burdens and the increasing exposure to market risks raise concerns about debt sustainability.
At the launch of the 17th Edition of the Africa Pulse Report, Albert G. Zeufack named Ghana as among 18 countries in Africa classified at high-risk of debt distress as at March 2018, compared with eight countries in 2013.
Government ended 2017 with a debt stock of GHS 142.5 billion in the latest Bank of Ghana (BoG) summary of Economic and Financial Data.
The GHS 142.5 billion debt stock also meant that the debt-to-GDP stood at 70 percent.
Zeufack recommends that countries pay attention to how debts are growing, as well as building the needed capacity to manage the new kind of risk.
“Because, countries are certainly going to be dealing with a completely different structure of debt,” he explained.
He mentioned that the Bank is working with countries to make sure concessional debt remain the first step.
“We are working with countries to see how we can leverage the concessional debts to bring in more private investment, which basically have a profile of debt that would be more sustainable,” Zeufack said.
Data from BoG shows that the debt stock had gone up by US$ 3.5 billion.
The external debt ending December 2107 stood at US$ 17.2 million, representing 37 percent of the total debt stock as at December 2017.
Domestic debt stood at GHS 66.7 billion, representing a Debt-to-GDP ratio of 32.7 percent. This means that the country may have carried out more external borrowings over that period.
Government planned to raise GHS 11.1 billion in the first quarter according to its issuance calendar.
Of this amount, GHS 8,961.30 million is to rollover maturities.
The remaining GHS 2,164.61 million is to meet government’s financing requirements for the period.
The calendar shows that government is actually going to borrow less this quarter compared to the same period, last year.
Generally, public debt relative to GDP is on the rise in the region, and the composition of debt has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones.
By Joshua W. Amlanu
