Ghana’s public debt saw a sharp increase of GH¢46.4 billion in the first two months of 2024, soaring to GH¢658.6 billion ($53.1 billion), according to data from the Bank of Ghana. This surge pushed the country’s debt to 62.7% of its Gross Domestic Product (GDP).
The Bank of Ghana’s May 2024 Summary of Economic and Financial Data disclosed that Ghana’s debt stood at GH¢611.2 billion at the close of 2023. However, it escalated to GH¢626.0 billion in January 2024 and further rose to GH¢658.6 billion in February 2024.
The significant uptick in debt was primarily attributed to the depreciation of the cedi and increased domestic borrowing by the government. Specifically, domestic debt surged by GH¢18.5 billion, while external debt saw a rise of GH¢28.9 billion, largely influenced by the weakening of the cedi.
By February 2024, the external debt component amounted to $30.6 billion (GH¢350.3 billion), constituting 36.1% of GDP. Concurrently, domestic debt stood at GH¢278.7 billion, equivalent to 36.1% of GDP.
Although the government’s fiscal operations remained in line with targets, with a deficit-to-GDP ratio of 2.6% in the first quarter of 2024 compared to 1.8% in the same period last year, the primary balance recorded a deficit of 1.4% of GDP in March 2024.
In response to economic challenges, Ghana suspended interest payments on its external loans in December 2022. Presently, the country has received a Memorandum of Understanding from its bilateral creditors for restructuring part of its external debt and is engaged in negotiations with bondholders following an agreement with bilateral creditors reached in January 2024.