Ghana, according to the Paramount Chief of the Asogli State, Togbe Afede XIV, is the most indebted African country.
Togbe Afede XIV made the assertion in a December 2022 article which he reiterated in his recent article dated December 26, 2023, titled “Bank of Ghana Has Failed Us.”
Very alarming, as I wrote in my December 2022 article, is the fact that we have piled on so much debt, and are now Africa’s most indebted country, yet we still lack the basic socio-economic infrastructure required for development – good roads, hospitals, schools, etc. Making matters worse, are the massive judgment debts, the results of greed and recklessness, staring us in the face,” he posited in his recent article.
Africa’s total external debt according to Dr Hippolyte Fofack, Chief Economist and Director of Research at Afreximbank, is estimated to be about $726 billion.
That makes it less than a third of Italy’s debt estimated at about $2.8 trillion. When expressed as a percentage of GDP, Africa’s total external debt is 27%, compared to 130% in Europe.
Ghana’s public debt reached an unprecedented high surging to GHS 569.3 billion in April 2023, equivalent to a staggering 71.1% of Gross Domestic Product (GDP). Measured in dollar terms, Ghana’s debt stock stood at a substantial $52 billion.
Examining the components of the total public debt, the external portion amounted to $29.3 billion (¢321.4 billion) in April 2023, marking an uptick from $29.0 billion (¢240.9 billion) reported in December 2022, underscoring the strain on external liabilities.
The domestic debt also surged to GHS 247.9 billion by the end of April 2023, comprising approximately 30.9% of GDP. This represented a notable shift from the GHS 232.3 billion figure reported in December 2022, which accounted for around 38.1% of GDP.
At the moment, Ghana is in talks with its external creditors to restructure some $20bn of its $29bn external debts.
Ghana’s bilateral lenders, including the governments of China and France who co-chair the Official Creditor Committee (OCC), are scheduled to meet the Finance Minister on Monday, January 8, 2024, to discuss restructuring some $5.4 billion in loans to the country.
The country is also in talks with overseas bondholders to restructure its more than $13 billion in international debt. Holders of the bonds include major global asset managers such as BlackRock, PIMCO, Vontobel, AllianceBernstein and Neuberger Berman.
