Ghana’s public debt soars by GH¢46.4bn in early 2024, hits GHC658.6bn

Ghana’s public debt has surged by GH¢46.4 billion in the first two months of 2024, reaching GH¢658.6 billion ($53.1 billion), according to the Bank of Ghana's latest data.

The Central Bank’s May 2024 Summary of Economic and Financial Data revealed that the country's debt, which stood at GH¢611.2 billion at the end of 2023, climbed to GH¢626.0 billion in January 2024 and further to GH¢658.6 billion by February 2024.

The significant increase in public debt is primarily due to the depreciation of the cedi and heightened government borrowing on the domestic market. Specifically, domestic debt rose by GH¢18.5 billion, while external debt swelled by GH¢28.9 billion, largely driven by the weakening cedi.

As of February 2024, the external portion of the total public debt was $30.6 billion (GH¢350.3 billion), accounting for 36.1% of GDP. Similarly, domestic debt was GH¢278.7 billion, also representing 36.1% of GDP.

Despite the rising debt levels, the Central Bank reported that the government’s fiscal operations remained on target. The deficit-to-GDP ratio stood at 2.6% in the first quarter of 2024, up from 1.8% during the same period the previous year. Additionally, the primary balance recorded a deficit of 1.4% of GDP in March 2024.

In light of economic challenges, Ghana suspended interest payments on its external loans in December 2022. This led to a Memorandum of Understanding with bilateral creditors on restructuring part of the external debt. After securing a deal with bilateral creditors in January 2024, Ghana is now in negotiations with bondholders to further manage its debt situation.