Ghana’s public debt stock rose by ¢13billion to hit ¢304.6 billion in March 2021, the latest Bank of Ghana (BoG) Summary of Economic and Financial Data has revealed.

This is equivalent to 70.2% of Gross Domestic Product (GDP), lower than the 76.1% registered in December, 2020.

The fall in debt to GDP ratio is probably due to the expected expansion in the size of the economy, despite the impact of Covid-19.

The $3billion Eurobond raised by the country in March this year, accounted for this jump in the debt.

Between December, 2020 and March, 2021, ¢13billion was added to the country’s debt. The debt stood at ¢291.6 billion at the end of last year.

The domestic debt went up to ¢163.6 billion at the end of the first quarter of 2021, compared with ¢149.8 billion in December 2020. This is equivalent to 37.3% of GDP.

The external debt stood at ¢141 billion ($24.6 billion) in March 2021, as against ¢141.8 ($24.6 billion). This is approximately 37.7% of GDP.

Importantly, the financial sector debt went down by ¢100 million to ¢15.2 billion. It is equivalent to 3.5% of GDP.

The debt could go down if levies collected to settle the financial sector debt is used to settle part of it.

IMF, World Bank worried about Ghana’s debt

The International Monetary Fund and the World Bank have all expressed worry about the alarming increase in the country’s debt, saying it’s not sustainable, going forward.

They warned that the nation is gradually into the Highly Debt Distressed category.

The IMF said the country’s debt will go above ¢300billion before the end of 2021.

Per its estimation, Ghana’s debt to GDP ratio will also surge to 83.2% in 2022, and then further to 84.8%, 86.0% and 86.6% in 2023, 2024 and 2025 respectively. It will however drop slightly to 85.5% in 2026.

The country spends about 49% of its tax revenue to settle interest payments.