Ghana’s public debt stock shoots up to GH¢391.9 billion ending March 2022 – BoG

The Summary of Economic and Financial Data by Bank of Ghana (BoG) has revealed Ghana’s public debt stock remarkably shot up by GH¢40.1 billion to GH¢391.9 billion as of the end of March, 2022.

The increase in the debt, according to the BoG, is mainly due to exchange rate fluctuation and to some extent borrowings from the domestic market.

In the first quarter of 2022, the cedi assumed a free fall to the dollar.

However, the depreciation of the local currency was stopped in April 2022, following monetary measures by the Bank of Ghana.

Regarding the Gross Domestic Product (GDP) of the country, the debt was estimated at 78%.

This is slightly lower than the 80% recorded in December 2021.

The International Monetary Fund (IMF) had in its April 2022 Fiscal Monitor predicted Ghana’s debt to Gross Domestic Product (GDP) ratio of 84.6% in 2022.

According to the Fund, the country’s total debt was estimated at 81.8% of GDP in 2021, higher than the 80.1%, approximately GH¢351.8 billion quoted by the Bank of Ghana.

The Fund also said the country’s debt-to-GDP ratio will increase from 2022 to 88.4% in 2026, before falling to 87.4% in 2027.

But prior to that it will record relatively same debt-to-GDP ratio of 84% in 2022 and 2023, and later surge to 85% and 86% in 2024 and 2025 respectively.

Debt accumulation

The BoG data indicated that the debt inched up by GH¢20.5 billion in January 2022 and subsequently GH¢19.7 billion in February 2022.

In terms of the domestic debt, it went up by ¢8 billion in the first quarter of 2022 to GH¢189.9 billion in March 2021, equivalent to 37.8% of GDP.

Similarly, the external component of the total public debt shot up to $28.4 billion (GH¢201.9 billion) in March 2022, from $28.1 billion in December 2021.

Clearly indicates that there were no borrowings from the external front in the first quarter of this year, according to the figures released.

The debt-to-GDP ratio of the external debt is however approximately 40.2% of GDP.

The cedi component shot up by GH¢31.9 billion in the first three months of 2022, primarily due to the decline in the value of the cedi to dollar during the period.

On the other hand, the financial sector resolution bond went down to GH¢14.6 billion in March 2022, from ¢14.9 billion recorded in December 2021. This is equivalent to 2.9% of GDP.