Cedi Depreciation Balloons Ghana’s Debt To Over GH¢393bn; 78.3% Of GDP

Latest figures released by the Bank of Ghana put Ghana’s total public debt stock, as of June 2022, at USS 54.4 billion or GH¢393.4 billion.

In Dollar terms, the debt dropped by about $4 billion in the first 6 months of the year, from $58.6 billion in December 2021 to $54.4 billion in the first half of the year 2022.

In Cedi terms, however, the total debt stock within the first 6 months of this year, increased by about GH¢41 billion.

Per the data from the Central Bank’s Summary of Economic and Financial Data report, for July 2022, an additional 41.6 billion Ghana cedis has pushed Ghana’s public debt stock to GH¢393.4 billion as of June 2022.

The June 2022 debt figure brings Ghana’s debt to gross domestic product, GDP ratio to 78.3%, using an estimated GDP for 2022 of about 502 billion Ghana cedis.

Despite Ghana’s total public debt stock increasing from 351.8 billion Ghana cedis in December 2021 to 393.4 billion Ghana cedis in June 2022, the debt figure in dollar terms dropped from $58.6 billion in December 2021 to $54.4 billion at half year, 2022.

The new debt figure of GH¢393.4 billion represents an increase of GH¢41.6bn from the GH¢351.8bn total public debt recorded in December 2021.

A look at the data from the Central Bank shows that year on year, from June 2021 to June 2022, the debt stock rose by about 17.5% from 334.8 billion Ghana cedis to 393.4 billion Ghana cedis.

On a year-on-year basis, that is from June 2021 to June 2022, that represents an increase of GH¢58.6 billion.

A further breakdown of the debt numbers shows that the component of debt secured locally rose by about 8 billion Ghana cedis from 181.8 billion Ghana cedis in December 2021 to 190.1 billion Ghana cedis in June 2022, which represents about 38% of the projected GDP for 2022.

The external component of the debt increased significantly, however, by about 33 billion Ghana cedis in the first six months of 2022, from 170.0 billion Ghana cedis in December 2021 to 203.4 billion Ghana cedis in June 2022.

The overall increase in the debt numbers in cedi terms, according to data from the Bank of Ghana, came largely from the over 16% depreciation of the cedi against the dollar from December to June 2022.

According to the Central Bank, the US Dollar, on the interbank foreign exchange market, was selling at around 6 cedis in December 2021 and at about 7 cedis 43 pesewas in June 2022.