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Ghana’s debt jumped 1.66% to hit GHS263bn in July 2020
Sep 26, 2020
Ghana’s total public debt stock jumped by 1.66 percent to hit GHS263.1 billion [$46.3bn] in July 2020, according to the latest Summary of Macroeconomic and Financial Data.
This represents about 68.3 percent of the country’s Gross Domestic Product, and is gradually nearing the dreaded 70% of GDP.
In June 2020, the nation’s debt was estimated at GHS258.8 billion, approximately 67.2 percent of GDP.
From the figures, the external component alone is estimated at GHS138 billion [$24.3bn], representing 35.8 percent of GDP.
The domestic component of the debt is also estimated at GHS125.1 billion, approximately 32.5% of GDP.
The financial sector resolution bond however constitute GHS14.2 billion, which is equivalent to 3.7 percent of GDP.
Between January 2020 and July 2020, Ghana’s debt has shot up by 28.5%. In January 2020, the total public debt stock was GHS204.6 billion.
Concerns expressed regarding the rising debt
Prior to covid-19 pandemic, the World Bank and the International Monetary Fund had expressed worry about the nation’s rising debt, saying, it poses challenges to the fiscal Ghanaian economy.
What this means is that if the debt levels are not checked it will get to a stage whereby the nation might struggle to settle interest payments [principal and interest], particularly when the cedi begins losing grounds against the US dollar.
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