According to Ghana's Finance Minister Ken Ofori-Atta, the public debt stock is far more than the nation's GDP.

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He claims that one of the factors contributing to Ghana's high debt levels has been the utilization of a significant portion of tax revenue for debt payments.

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He continued by saying that an IMF review of debt sustainability had shown Ghana's debt to be unsustainable.

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On December 5, 2022, the minister announced the debt exchange program and stated that the Debt Sustainability Analysis (DSA) had conclusively shown that Ghana's public debt was unsustainable and that, if nothing was done, the government might not be able to fully service its debt in the future.

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“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.

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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.

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

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“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.

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Source: Ghanaweb

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