The Bank of Ghana’s Summary of Economic and Financial Data has revealed that the country’s public debt stock has hit GH¢341.8 billion as of the end of September 2021.
According to the data, between July and September 2021, some GH¢5.9 billion new loans were added to drive up the country’s debts to the present level.
The increase in Ghana’s debt stock was hiked up largely by domestic debt and a slight depreciation of the cedi to the dollar.
The current GH¢341.8 billion debt stock is equivalent to 77.8% of Gross Domestic Product (GDP) and confirms concerns by analysts and economists that the country’s debt has reached unsustainable and dangerous levels.
According to the data from the Bank of Ghana, the domestic debt went up to GH¢178.1 billion in September 2021, up from GH¢173.9 billion recorded in July 2021. This is equivalent to 40.5% of GDP.
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The resultant consequence is the "crowding out effect” whereby businesses are competing for borrowed funds with the government.
Importantly, the financial sector resolution bond stayed the same at GH¢14.9 billion in September 2021. This is equivalent to 3.4% of GDP.
External debt fell by $100 million in August to $27.9 billion, equivalent to 37.2% of GDP.
However, the cedi component of the external debt shot up because of the decline in the value of the cedi to the dollar.