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As of July 31, 2024, Ghana’s debt has sharply increased to a worrying GH¢761 billion, sparking worries about the country’s economic stability, which is equal to US$51.1 billion.
This number represents a slight rise from the previous total of GH¢587.7 billion, which was equal to US$53.5 billion.
The significant increase in debt has sparked discussions among policymakers, economists, and the public, as many blame different factors for this financial strain.
The Minister of Finance, Dr Amin Adam, has pointed out that the weakening of the Ghanaian cedi is a major factor contributing to the increasing debt.
He stated that the continued devaluation of the cedi against key foreign currencies, notably the US dollar, has notably raised the expenses linked to repaying foreign debts, consequently adding to the overall debt burden.
During the monthly Economic Update at the Finance Ministry in Accra on Thursday, August 29, 2024, he shared information about the economic performance, attributing the rise in cedi terms and fall in US dollar terms to the cedi’s depreciation.
He said “As of July 31, 2024, Ghana’s provisional nominal central government debt stood at GH¢761.1 billion, equivalent to US$51.1 billion. This represents a nominal increase from the previous amount of GH¢587.7 billion, equivalent to US$53.5 billion.”
“The increase in cedi terms and decrease in US dollar terms is attributed to a combination of factors, including cedi depreciation, disbursements from multilateral institutions, and domestic financing of the budget,” he added.
Analysts are worried about Ghana’s ability to meet its financial obligations due to the increasing debt, and they caution that there could be consequences if the situation is not turned around.
The IMF and other financial organizations have pointed out that Ghana’s debt levels are unsustainable, advising the government to take strict fiscal measures to control the increase in debt.
NKONKONSA.com
