Ghana's public debt will by end of this year account for about 72 percent of the total value of the economy, that is the projection from the International Monetary Fund in its new fiscal monitor report.
The report was released in Lima, Peru Wednesday ahead of the Fund’s annual meetings.
Current figures by the Ministry of Finance put the country’s public debt – as at July this year – at around 83 billion Ghana cedis, which translates into 62 percent of GDP.
The IMF’s fiscal monitor report, which assess the financial position of over 100 countries around the world, is forecasting that Ghana’s public debt will increase further in the coming months to cross the dreaded 70 percent mark by end of year.
Already the IMF has classified Ghana as a High risk of Debt Distress Country. This means that immediate measures must be taken to reduce Ghana’s public debt, because the country’s current financial position might make it difficult to pay its debts on time.
When a country is classified as High Debt Distress country, the IMF usually prescribes a freeze on borrowing by that country until it makes some progress in reducing its debts.
Ghana’s rising public debt has already affected the country’s ability to secure good assessment from credit rating agencies.
Some agencies are even warning investors outside the country that it might be risky for them to lend money to Ghana.