Data from the Bank of Ghana (BoG) reveals that Ghana’s public debt stock surged by ¢134.7 billion in the first four months of 2023, reaching ¢569.3 billion in April 2023, equivalent to approximately 71.1% of Gross Domestic Product (GDP) or $52 billion.
The increase in debt was mainly attributed to the depreciation of the cedi during the period and, to some extent, an increase in domestic debt by ¢15.9 billion in the first four months of the year.
In December 2022, the debt stock stood at ¢434.6 billion, approximately 71.2% of GDP.
According to the July 2023 Summary of Economic and Financial Data, Ghana’s debt in cedi terms rose to ¢547.8 billion ($50.7 billion) by the end of January 2023 and further increased to ¢564.1 billion ($51.2 billion) and ¢569.5 billion ($51.7 billion) in February and March 2023, respectively.
The Central Bank’s data also shows that the external component of the total public debt stood at $29.3 billion (¢321.4 billion) in April 2023, higher than the $29.0 billion (¢240.9 billion) recorded in December 2022. The domestic debt stood at ¢247.9 billion at the end of April 2023, approximately 30.9% of GDP, compared to ¢232.3 billion, approximately 38.1% of GDP, in December 2022.
Ghana’s nominal GDP experienced a surge of ¢190.7 billion from December 2022 to ¢800.9 billion in April 2023, primarily attributed to elevated prices of goods and services, driven by high inflation rates.
In terms of fiscal deficits, the government’s fiscal deficit to GDP ratio stood at 1.8% in April 2023, a significant decrease from 8.3% of GDP recorded in December 2022. The primary balance stood at 0.7% of GDP in April 2023.
Ghana took various measures to address its economic challenges, including suspending payment of loans to external creditors in December 2022 and restructuring some domestic debt in February 2023.
These efforts paved the way for the approval of a $3 billion Extended Credit Facility (ECF) programme by the International Monetary Fund. Additionally, the country reached an agreement with banks in June 2023 to restructure ¢15 billion ($1.36 billion) of locally issued U.S. dollar bonds and cocoa bills.
However, agreements with external creditors are still pending before restructuring the external debt.