Latest figures released by the Bank of Ghana indicate that in two months, the country’s public debt stock has increased by GH¢3.5 billion.
By this, Ghana’s total public debt stock increased from about GH¢332 billion in May 2021 to about GHC336 billion in July 2021.
According to the latest Bank of Ghana’s Summary of Macroeconomic and Financial Data, the new debt figure of about GH¢336 billion brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.4% as of the end of July 2021.
Despite the increase in the nation’s debt stock, the rate of increase has slowed down, when compared to the about GH¢30 billion added in April and May 2021.
A breakdown of the debt numbers shows that the component of debt secured locally rose marginally by GH¢2.6 billion from GH¢170.8 billion in May 2021 to GH¢173.4 billion in July 2021.
The new figure represents 39.5% of the projected GDP for 2021.
The domestic component of the total public debt contains the financial sector resolution bond.
Compared to the GH¢15.2 billion recorded at the end of May 2021, the financial sector resolution bond reduced to GH¢14.9 billion in July 2021, representing 3.4% of GDP.
The data also shows that the component of the debt secured outside the country rose marginally from GH¢161.6 billion in May 2021 to GH¢162.5 billion in July 2021. This represents 37.0% of GDP.
However, a critical look at the data also shows that despite the rise in the debt stock in cedi terms, it decreased in dollar terms.
In May 2021, the dollar equivalent of the nation’s debt was 57.9 billion dollars. This increased to 58.1 billion dollars in June. It however decreased to 57.9 billion dollars in July 2021.
In an interview with Citi Business News, Economist and lecturer at the University of Ghana, Dr. Patrick Asuming explained that government needs to be cautious in its optimism despite the slow-down in the rate of increase.
“It’s good that there has been some slowdown, but I don’t think we should not get carried away. Our situation hasn’t really changed much from the last reading. I do really think that, that in itself, is the problem. The problem is, while we have been piling up the debt, we really don’t have much to show for it. Even though we are recovering, the economy hasn’t been at its strongest. Also, in the last couple of months, the cedi has depreciated a little bit even though the dollar value looks smaller. It is obvious because we are repaying but because the currency has lost value, if you convert it to cedi, it looks like in cedi terms, it is higher,” he said.