Ghana’s public debt from Jan – Sept 2022 is $48bn – Ofori-Atta

Ghana’s provisional debt data as at end September 2022 shows a significant increase in the country’s public debt largely due to exogenous factors, Finance Minister Ken Ofori-Atta has said.

As at the end of September 2022, provisional figures indicate that total gross public debt stood at GH¢467,371.31 million (US$48,871.34 million), representing approximately 75.9 percent of GDP, Mr Ofori-Atta told parliament on Thursday, 24 November 2022, when he delivered the 2023 budget statement.

The domestic debt component he disclosed is GH¢195,657.60 million, which is 31.79 percent of GDP, whilst external debt is GH¢271,713.71 million, representing 44.15 percent of GDP.

The increase in the domestic debt he explained is largely on account of rising interest costs adding “domestic debt as a share of total public debt reduced from 51.6 percent in 2021 to 41.9 percent as at end September 2022.”

Mr Ofori-Atta further noted that the external debt as a percentage of the total debt stock is 58.1 percent as at end September 2022.

He said the sharp growth in the external debt stock is largely driven by the depreciation of the local currency as the depreciation of the Ghana cedi added GH¢93,855.15 million to the external debt stock.

Overall, he disclosed that debt accumulation increased from 20.7 percent in 2021 to 32.7 percent as at end September 2022, reflecting the impact of the depreciation of the Ghana cedi on the external debt side.

Touching on the outlook for external sector in 2023 and the medium term, Mr Ofori-Atta said the external sector performance in the outlook will depend largely on the quick resolution of the Russia-Ukraine war and the outcome of recession fears in advanced economies.

“The thrust of the external sector will focus on rebuilding external buffers enough to cover at least three and half months of imports of goods and services to cushion the economy against adverse external shocks. This will be underpinned by, among others, bilateral support, and strong remittance inflows,” he stated.

On measures by the Bank of Ghana to address the exchange rate depreciation, the Finance Minister noted that the Bank of Ghana will continue to monitor inflation developments and respond appropriately to contain price pressures.

He said monetary policy will focus on using the monetary policy rate to, among others, contain inflationary pressures.

“Since August 2022, the Bank of Ghana has successfully been working with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation,” he added.