The International Monetary Fund (IMF) has projected that Ghana will end the year with a Debt-to-GDP of 90.7%.

This was captured in its Fiscal Outlook Report released on the sidelines of the on-going IMF/World Bank Annual meetings in Washington DC, USA.

The report, also forecasts that the Debt–to-GDP could reduce to 87.8% in 2023. 

According to the IMF, revenue expressed as a ratio of GDP could also hit 14.1% at the end of 2022.

It will subsequently increase to 14.7% in 2023 and 15.4% in 2024”, the report said, classifying Ghana as a Low Income Developing Country.

Implications 

Ghana is currently undergoing Debt Sustainability Analysis with the IMF and the World Bank. This is expected to help the country ascertain the true levels of the debt stock.

The country was recently classified as a High Risk of Debt Distress by the World Bank and IMF in its Debt Sustainability Analysis.

The two Bretton Wood institutions are currently conducting a new Sustainability Debt Analysis on Ghana - a situation that could influence the outcome of an economic programme with Ghana by the end of 2022.

The Finance Minister, Ken Ofori-Atta, has already indicated that government is working hard to reach a programme with the IMF by November 2022.

Government is hoping to secure a programme with the IMF before the 2023 Budget presentation in parliament within the same period.

Debt to GDP issues

In October 2022, data from the Bank of Ghana pegged the country’s debt stock at ₵402 billion as of July 2022, representing 68% of GDP .

Some financial observers have stated that with an expected expansion of the economy and an IMF programme, the country’s debt stock may not reach “unsustainable levels”.

World Bank on Ghana’s debt

The World Bank in its Africa Pulse Report released in October 2022 projected that Ghana will end 2022 with a Debt –to –GDP ratio of 104%.

By this, Ghana’s debt stock could go above the projections made by the IMF.

The increase could be linked largely to the cedi depreciation and review of payment terms for some loans as well as new borrowings by government