The International Monetary Fund (IMF) is projecting that Ghana’s Debt to GDP Ratio will increase further to 98.7% by the end of 2023.

This was captured in its Fiscal Outlook Report released at the Annual IMF/World Bank Spring Meetings in Washington DC USA.

Ghana recently undertook a Domestic Debt Exchange Programme (DDEP) to reduce the country’s debt stock.

The IMF in the report also forecast the Debt-to-GDP Ratio to reduce marginally to reach 92.8% in 2024.

Launching the report, the Director of Fiscal Affairs at the IMF, Vitor Gaspar advised the government of Ghana to ensure that fiscal policy is consistent with monetary policy to restore price and financial stability, while supporting the most vulnerable.

“Abrupt changes in financial conditions also call for fiscal restraint to tackle fiscal vulnerabilities. To that end, governments will need to give greater priority to rebuilding fiscal buffers by developing credible risk-based fiscal frameworks that promote”, Mr. Gasper said.

Ghana’s debt situation and the IMF Report

The March 2023 Bank of Ghana’s Economic and Financial Data report showed that Ghana’s Total Debt Stock ending November 2022 stood at ¢575 billion, representing 93.5% of GDP.

However, based on the Gross Debt Levels projection, that could be going up by about 5% for 2023.

Some analysts have stated that the current debt restructuring by government may impact on the debt numbers by the end of 2023.

The Finance Ministry in its Debt Strategy Paper had indicated that the Domestic Debt Exchange Programme will end up restructuring about ¢138 billion worth of bonds.

Classification of Ghana’s Economy

The IMF in the Fiscal Monitor Report also classified Ghana’s economy as Low Income Developing Country. 

The classification comes after some reports stated that Ghana has been categorised as “Highly Indebted Poor Country”

Value of Ghana’s Economy and the Debt Ratio

The Bank of Ghana in its Summary of Economic and Financial Data report in March 2023 pegged the value of the country’s debt as of December 2023 at ¢615.8 billon.

The total debt stock ending November 2022 was pegged at ¢575.7 billion.

Government was hoping to use the DDEP to restructure about ¢137 billion of. 

However, only ¢98 billion worth of the bonds were tendered for the debt restructuring programme.

Government is also seeking to restructure or possibly seek debt cancelation of more than $5 billion of debt owed to the Paris Club Members.

IMF on Ghana’s Economic Projection for 2023

The IMF is projecting that Ghana’s Gross Domestic Product (GDP) growth rate for 2023 will slow to 1.6% 

This is lower than Ghana’s forecast of 2.8% captured in the 2023 Budget.

The IMF in its 2022 World Economic Outlook Report projected Ghana's growth rate for 2023 at 3.6%.

The IMF in the report linked the slowdown to some global economic challenges, such as the COVID-19, Russia-Ukraine War, Energy issues and its impact on Ghana’s economy for this year.

The IMF was however upbeat about the economy picking up in 2024.