Ghana's debt-to-GDP ratio balloons to 75.7% amid economic strains

Ghana's public debt has ballooned to a staggering GH¢761.2 billion ($51.1 billion), equivalent to 75.7% of the country's GDP, according to the Bank of Ghana's latest data.

This sharp increase from GH¢633.3 billion earlier this year and GH¢587 billion in 2023 has raised red flags about Ghana's ability to manage its finances without exacerbating economic strain.

External debt now accounts for 47.1% of GDP, totaling GH¢470.3 billion ($31.6 billion), up from 36% at the start of the year. Although this is below the 39.2% recorded last year, experts caution that Ghana's high debt levels pose significant risks to economic stability.

Ghana's nominal GDP stands at GH¢1.02 trillion, fueling concerns about the country's ability to service its debt without compromising economic growth. Investors and global financial institutions are closely monitoring Ghana's pursuit of debt relief from external creditors.

The alarming debt figures underscore the urgent need for structural reforms to restore macroeconomic stability and minimize the risk of further debt distress. Effective debt management and economic reforms are critical to mitigating Ghana's economic vulnerabilities.

Ghana's key economic indicators now paint a worrisome picture: GH¢761.2 billion ($51.1 billion) in public debt, 75.7% debt-to-GDP ratio, GH¢470.3 billion ($31.6 billion) in external debt, 47.1% external debt-to-GDP ratio, and GH¢1.02 trillion nominal GDP.

Source: Lead News Online