Ghana’s debt distress rating upgraded to moderate risk- IMF rep states
Ghana’s debt distress rating has been upgraded from high risk to moderate risk, marking the first such improvement in 13 years, according to the International Monetary Fund (IMF). IMF Resident Representative to Ghana, Dr Adrian Alter, described the development as a major achievement, noting that it came two years earlier than initially expected. Speaking on … The post Ghana’s debt distress rating…
The International Monetary Fund (IMF) has upgraded Ghana's debt distress rating from high risk to moderate risk, a significant improvement in the nation's debt situation that has not occurred in 13 years, according to the IMF's Resident Representative to Ghana, Dr Adrian Alter. Dr Alter described this development as a major achievement, stating that it happened two years ahead of the expected timeline.
The upgrade was based on the latest Debt Sustainability Analysis (DSA) conducted at the end of Ghana's Extended Credit Facility (ECF) programme, which revealed substantial improvements in the country's debt sustainability indicators. Dr Alter explained that the key indicators now fall below the required thresholds, with Ghana's central government public debt falling to approximately 45 percent of Gross Domestic Product (GDP).
While acknowledging the need for the government to maintain its efforts in reducing borrowing and interest costs, which currently constitute about one-third of government expenditure, Dr Alter emphasized the importance of increasing domestic revenue mobilisation to support capital expenditure without imposing undue pressure on borrowing.
He cautioned against the government competing with the private sector for funds to expand businesses and create jobs, stressing that the private sector should be the primary driver of job creation and economic growth. Dr Alter noted a positive trend in private sector credit, which had risen by about 40 percent year-on-year, according to the latest figures from the Bank of Ghana, indicating a promising outlook for economic expansion.
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