Debt exchange: Public debt stock exceeds 100% of GDP - Ofori-Atta

Finance Minister Ken Ofori-Atta has stated that Ghana’s public debt stock has exceeded the country’s GDP by more than 100%.

According to him, one of the reasons for Ghana’s high debt levels has been that a chunk of the government’s revenue is being used for debt servicing.

He added that a debt sustainability analysis conducted by the International Monetary Fund revealed that Ghana’s debt is unsustainable.

Announcing the debt exchange programme on December 5, 2022, the minister said: “The Debt Sustainability Analysis (DSA) demonstrated unequivocally that Ghana’s public debt is unsustainable, and that the Government may not be able to fully service its debt down the road if no action is taken.

“Indeed, debt servicing is now absorbing more than half of total government revenues and almost 70% of tax revenues, while our total public debt stock, including that of State-Owned Enterprises and all, exceeds 100% of our GDP. This is why we are today announcing the debt exchange which will help in restoring our capacity to service debt,” he added.

The Minister announced that Ghana is embarking on a debt exchange programme where domestic bondholders are allowed to voluntarily exchange their bonds with fresh bonds.

He added that the government is expected to reach some level of agreement with the International monetary fund for financial support.

“We expect to reach a Staff-Level Agreement soon on an IMF programme aimed at restoring macroeconomic stability and protecting the most vulnerable. To this end, as a government, we are determined to implement wide-ranging structural and fiscal reforms to restore fiscal and debt sustainability and support growth,” he said.

SSD/FNOQ