Ghana's public debt stock has increased significantly, rising by GHC13.1 billion between May and July. According to the Bank of Ghana's latest economic and financial data, the total debt stock increased from GHC720.8 billion in May to GHC733.9 billion in July. This increase was mainly driven by a rise in domestic borrowing. The debt stock had marginally declined to GHC719.5 billion in June before rising again.
In dollar terms, Ghana's debt stock remained relatively stable over the period. The debt stock moved from $61.5 billion in May to $63.4 billion in June before easing to $62.8 billion in July. This stability in dollar terms suggests that the increase in debt was largely due to fluctuations in the local currency. The cedi's value has been under pressure in recent times, contributing to the increase in debt.
Domestic debt accounted for most of the increase in Ghana's debt stock. It rose from GHC379.1 billion in May to GHC396.7 billion in July, an increase of GHC17.6 billion. This significant rise in domestic debt raises concerns about the government's financing pressures. The increase in domestic borrowing may be a sign of renewed financing challenges facing the government.
External debt, on the other hand, declined slightly in dollar terms. It fell from $28.9 billion to $28.8 billion over the same period. In cedi terms, external debt also decreased from about GHC341.7 billion in May to GHC337.2 billion in July. This decline in external debt suggests that the government may be reducing its reliance on external borrowing.
Ghana's total public debt currently stands at about 45.9 percent of gross domestic product. Domestic debt accounts for approximately 24.8 percent of GDP. These figures indicate that Ghana's debt levels remain high, and the government needs to pursue measures aimed at containing debt accumulation while meeting its fiscal obligations.
The increase in domestic borrowing has raised questions about whether the rise is temporary or reflects renewed financing pressures on the government. The government will need to provide clarity on its borrowing plans to alleviate concerns about debt sustainability. The Bank of Ghana's data suggests that the government may need to adopt a more prudent approach to borrowing to avoid exacerbating debt challenges.
The government is currently pursuing measures aimed at containing debt accumulation while meeting its fiscal obligations. These measures are crucial in ensuring that Ghana's debt levels remain sustainable. The Bank of Ghana's data will continue to provide valuable insights into Ghana's debt dynamics, helping policymakers make informed decisions about borrowing and debt management.
Key points
- Ghana's public debt stock rose by GHC13.1 billion between May and July, driven mainly by an increase in domestic borrowing.
