Ghana to reach moderate risk of debt distress by 2028 – IMF Staff report

The International Monetary Fund (IMF) has said it expects Ghana to attain a moderate risk of debt distress by 2028.

According to the Fund’s Staff report on Ghana, this is based on the completion of majority of the domestic debt restructuring exercise undertaken by the Government of Ghana.

“The combination of the authorities’ [government] debt restructuring strategy and reforms under the programme is expected to deliver debt sustainability as it eliminates all threshold breaches under the Lower-Income Countries – Debt Sustainability Framework (LIC-DSF) by 2028 and restores a moderate risk of debt distress”, the IMF report noted.

The Bretton Wood institution further explained that Ghana’s 17th programme with the Fund will be fully financed within the first 12 months with good prospects especially for remaining years of programme.

As part of efforts to address current economic challenges, the government of Ghana to suspended external debt payments to official bilateral and external commercial creditors since December 2022.

The move resulted in massive accumulation of debt exposing the country to a debt distress position.

Meanwhile, Ghana’s public debt stood at GH¢434.6 billion as of December 2022 according to the Bank of Ghana’s Summary of Economic and Financial Data for April 2023.

This is a reduction of GH¢141.1 billion of the public debt representing 71.6 percent of the country’s Gross Domestic Product.

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