International rating agency Fitch has projected that Ghana ‘s public debt is on track to reach 99% of its Gross Domestic Product (GDP) by the end of 2023, a significant increase from the 88% recorded in 2022. This projection is primarily attributed to the persistent depreciation of the Ghanaian cedi against the US dollar.
Fitch’s analysis also suggests a gradual decline in public debt to 95% in 2024 and 94% in 2025, as the country navigates its current fiscal challenges and explores debt restructuring options. These projections take into account the state of Ghana’s economy, which has faced significant fiscal pressures in recent years.
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As of June 2023, Ghana’s public debt had surged to GH¢575.5 billion, equivalent to 71.9% of the national Gross Domestic Debt. This represented a marginal increase of GH¢6.3 billion compared to the GH¢569.2 billion public debt recorded in April 2023.
The September 2023 Bank of Ghana Summary of Economic and Financial Data indicates that the country’s public debt had increased by GH¢27.7 billion since January 2023, reflecting the growing fiscal challenges and economic pressures Ghana faces.
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Ghana’s public debt is categorized into external debt, which accounted for GH¢328.6 billion (approximately US$29.9 billion), and domestic debt, which amounted to GH¢246.9 billion (approximately $30.8 billion). Notably, external debt had increased by GH¢7.3 billion compared to the April 2023 figure of GH¢321.3 billion, while domestic debt had seen a slight decrease from GH¢247.9 billion to GH¢246.9 billion over the same period.
In contrast to the growing public debt, Ghana’s Nominal Gross Domestic Product has remained relatively stable at GH¢800.9 billion as of June 2023. This figure indicates a significant increase from the GH¢610.2 billion reported in June 2022, showcasing the evolving economic landscape and the country’s continued efforts to navigate fiscal challenges and promote economic growth.
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The implications of Ghana’s public debt projections and the economic measures taken to address them remain critical factors to watch as the nation works to maintain fiscal stability and sustainable economic development.
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