- May 26, 2022
- Posted by: Charles Yeboah Nixon
- Categories: Economics, Finance
The African Development Bank (AfDB) says Ghana remains at high risk of debt distress with a debt-to-GDP ratio of 77.5% in September 2021, against 76.1% in December 2020.
In its 2022 African Economic Outlook report, it said fiscal deficit will narrow from 15.2% of GDP in 2020 to 12.1% in 2021, due to increased revenue collection.
The current account deficit, it also said, is estimated to have narrowed to 2.1% of GDP in 2021 from 3.1% of GDP in 2020, given the merchandise trade surplus.
Foreign exchange reserves also increased from $8.6 billion in December 2020 to $9.7billion in December 2021 (4 months of imports).
Again, the banking sector remained strong in 2021 with a capital-adequacy ratio of 20.8% at end-June 2021, nearly double the regulatory minimum of 11.5%.
Poverty declined from 12% in 2020 to 11% in 2021, given GDP per capita growth of 2.3%, from a contraction of 1.7% in 2020. However, unemployment increased by 2.3percentage points to 13.4% in 2015–21.
The country has committed the SDR allocation of $1billion to finance the 2022 budget deficit $1billion to finance the 2022 budget deficit.
Outlook and risks
AfDB said the outlook of the Ghanaian economy remains positive, with projected Gross Domestic Product (GDP) growth of 5.3% and 5.1% in 2022 and 2023 supported by the Ghana COVID-19 Alleviation and Revitalization of Enterprises Support Programme. Potential inflationary pressure exists due to increased energy and food prices associated with the impact of the Russia-Ukraine war.