IMF expresses worry over Ghana’s rising debt stock

The International Monetary Fund (IMF), has expressed worry over Ghana’s rising debt stock noting the country has to implement some drastic measures to contain the debt situation.

Addressing the issue, Director of the African Department of the IMF, Abebe Amero Selassie, adviced government that it revise some of its debt sustainability programmes.

“Our engagement with Ghana is in the context of the Article IV policy discussions and we give our advice on what we think are the kind of reforms Ghana needs to implement to sustain development progress and of course particularly now that debt levels are high on the account of the pandemic and its effects on the path of GDP and also on aggregates like revenue mobilisation and the likes,” he said.

“Its even more important than ever for Ghana to strike a healthy balance between the need to continue to address development spending needs but also make sure that debt sustainability doesn’t get out of hand,” he added.

The MF has projected Ghana’s total debt stock to hit 86.6 percent in 2025.

According to the IMF, Ghana’s debt stock is expected to continue on an elevated path reaching 81.5 percent this year, 83.2 percent in 2022, and further to 84.8 percent, 86.0 percent and 86.6 percent in 2023, 2024 and 2025 respectively.

The country’s debt stock will however, reduce by 1.1 percentage points in 2026, ending 2026 at 85.5 percent.

The country’s debt projections stated in the Fund’s April 2021 Fiscal Monitor Report, could possibly push the Ghanaian economy into the debt-distress category, given the fact that the country is already at risk of high debt distress.

Ghana’s debt stock presently stands at Ghs 291 billion representing 76.1 percent of GDP.