According to the new data released by the Bank of Ghana, Ghana’s total public debt stock has increased once again.
The debt stock which ended the first quarter of 2021 at GH¢ 304.6 billion, increased by almost GH¢ 30 billion in April and May which saw Ghana’s total public debt rise to GH¢ 332.4 at the end of May 2021.
The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.6% as of the end of May.
This is the highest recorded so far in the past year, slightly higher than the debt to GDP ratio of 76.1% recorded at the end of 2020 according to data from the central bank.
A breakdown of the debt numbers shows that the component of the debt secured outside the country after remaining relatively stable in the first quarter rose significantly by about GH¢ 20 billion from GH¢ 141 billion at the end of March 2021 to GH¢ 161.5 billion at the end of May this year.
The external debt component as of the end of May 2021 made up 37.2% of the total value of the economy, which is projected to be about GH¢ 434 billion for 2021.
On the other hand, the component of the debt secured locally increased steadily in the first 5 months of 2021.
When compared with the figure recorded at the end of the first quarter, Ghana’s domestic debt rose by about GH¢ 7 billion, bringing total domestic debt to GH¢ 170.8 billion at the end of May this year from the GH¢163.6 billion recorded at the end of March this year.
The new figure represents 39.4% of the projected GDP for 2021.
The domestic component of the total public debt contains the financial sector resolution bond, which was GH¢ 15.2 billion at the end of May 2021.
According to the International Monetary Fund’s 2021 article IV consultation press release, which contains their staff report and statement by the Executive Director for Ghana, the IMF’s Debt Sustainability Analysis (DSA) shows that Ghana remains at high risk of external and overall debt distress under the baseline, even though public debt is assessed as sustainable going forward.
The Bretton Woods institution is meanwhile projecting Ghana’s Debt-to-GDP ratio to rise to 83.5% by the end of 2021.