- The World Bank has classified Ghana as a high debt distressed country which requires debt restructuring
- The Bretton Woods Institution also projected that the country’s debt to GDP would hit 104% by the end of the year
- This projection of the World Bank was captured in its October 2022 Africa Pulse Report, which indicated that Ghana’s debt is expected to jump significantly
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The country’s economic woes keep deepening by the day after a string of negative reviews by international bodies.
A country tagged as a high debt distressed cannot fulfill its financial obligations, which requires debt restructuring.
Bloomberg ranks Ghana's cedi second-worst performing currency in the world; worst on African continent
The Bretton Woods Institution also projected that Ghana’s debt to Gross Domestic Product (GDP) would cross the 100% mark by the end of the year.
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Ghana's Debt Is Expected To Jump Significantly From Last Year's Figure Of 76.6% - World Bank
In its October 2022 Africa Pulse Report, the World Bank said the country’s debt is expected to jump significantly from last year’s figure of 76.6% amid a widened government deficit, massive weakening of the cedi, and rising debt service costs.
The report also forecasted that Ghana’s debt to GDP will hit 99.7% and 101.8% of the country’s GDP in 2023 and 2024, respectively.
Ghana To Spend About 70% Of Revenue To Service Debt - World Bank
The Bank also added that the country would spend about 70% of its estimated revenue of $72 billion this year to service its debt.
Former President Mahama raises red flags over diversion of $100 million oil revenue; calls on Finance Minister to immediately refund cash as Ghana negotiates IMF deal
Ghana Negotiates $3 Billion IMF Bailout Package
This report from the World Bank is coming when officials of the International Monetary Fund (IMF) are finalizing a bailout package for Ghana.
Reeling under a high inflation rate which has seen a frequent increase in prices of goods and services, as well as a rapid depreciation of the Ghanaian cedi, the Akufo-Addo-led government returned to the Bretton Woods Institution for respite.
Government officials are, however, optimistic that an IMF economic package of $3 billion will help the country navigate its way out of the looming crisis.
Ghana's Public Debt To GDP Is About 100%; It Is Simply Unsustainable – Ato Forson Sounds The Alarm Bells
Earlier, YEN.com.gh reported that the Ranking Member of Parliament's Finance Committee, Dr. Cassiel Ato Forson, had sounded the alarm bells on the country's debt to GDP ratio.
Ghana’s oil resources: Minority ‘blows’ alarm over missing $100 million oil money as government negotiates IMF deal
According to him, the country's public debt is highly unsustainable and scary, making debt restructuring unavoidable.
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