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Ghana’s fiscal landscape has witnessed a significant shift as the nation’s public debt surged to GH₵610 billion by the end of December 2023. This marks a substantial 26.85 percent increase from the previous year’s GH₵446.3 billion. The current debt level now constitutes 72.5% of the country’s Gross Domestic Product (GDP), underscoring the growing financial burden on the economy.
The Bank of Ghana’s latest Summary of Economic and Financial Data for March 2024 reveals that despite the completion of a domestic debt exchange program, the public debt has climbed by GH₵163.7 billion. The depreciation of the local currency has significantly impacted the debt in dollar terms, pushing the total to US$52.4 billion.
A breakdown of the debt shows that external obligations account for GH₵350.3 billion (US$30.1 billion), while internal debt stands at GH₵259.7 billion, which is 30.9% of GDP. The external debt alone has risen by GH₵109.4 billion, with domestic debt experiencing a more modest increase of GH₵54.3 billion.
Amid these rising debt figures, Ghana’s nominal GDP has also grown, moving from GH₵614.3 billion to GH₵841.6 billion. This article delves into the implications of these numbers for Ghana’s economy and the path forward for fiscal stability.
