- Ghana’s public debt has shot up dramatically in the past months
- The debt increased from 12.8 billion cedis in 2019 to 286.9 billion cedis in 2020
- Government has so far blamed the increase on the coronavirus
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Ghana’s debt increased by 12.8 billion cedis to 286 billion cedis in November last year…..but this is largely due to coronavirus expenditure
Ghana’s public debt stock shot up by 12.8 billion cedis in October and November last year to hit 286.9 billion cedis in November 2020. That’s according to the latest Bank of Ghana’s Summary of Economic and Financial Data.
The rising debt which is a worry represents 74.4 percent of Gross Domestic Product that is the total value of goods and services produced in an economy within a period.
When this loan is shared among 30 million Ghanaians, each one is likely to pay very substantial amount.
But the increased debt was largely driven by covid-19 spending, in a form of stimulus packages to individual households and businesses, particularly small and medium scale enterprises that suffered significantly from the coronavirus pandemic.
The nation may get some relief in the repayment of some of the loans, particularly bilateral and multilateral loans. Many countries including some advanced economies had no option but to borrow from the International Monetary Fund and World Bank to stabilize their economies.
According to the data from the Bank of Ghana, the external component of the debt stood at 139.6 billion cedis, whilst the domestic component was however estimated at 147.3 billion cedis.
On the other hand, the financial sector resolution bond still remained unchanged at 15.4 billion cedis.
The International Monetary Fund had earlier forecast a 76.7 percent of debt-to-GDP ratio for the country in 2020.
Rating agency, Fitch, also said in December that African countries including Ghana that have credit ratings of B and stable outlook will not default in repayment of their loans despite the rising debt levels.
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