Ghana’s debt sustainability challenges persisted for 12 years, breached DSA indicators over period – Opoku-Afari
His article mentioned that the present value (PV) of public debt-to-Gross Domestic Product (GDP), which remained below the 55.0% threshold in the early 2010s, rose sharply after 2014 and persistently exceeded sustainable levels— reaching nearly 93% by 2022.
Ghana's debt sustainability has been a persistent issue for 12 years, with key Debt Sustainability Analysis (DSA) indicators breaching their thresholds from 2010 to 2022, according to Dr. Maxwell Opoku-Afari, a former First Deputy Governor of the Bank of Ghana. Despite borrowing support from the International Monetary Fund (IMF), the challenges remained unresolved.
The present value of public debt-to-GDP rose sharply after 2014, reaching nearly 93% by 2022, while the PV of external debt-to-GDP exceeded the 40% threshold since 2015. The 2015-2019 IMF program modestly reduced the external debt burden but the trend worsened during the COVID-19 period. Meanwhile, debt service-to-exports exceeded 15% since 2015, and debt service-to-revenue surpassed 40% of government revenues by 2022.
These breaches indicate systemic fiscal fragility, with solvency and liquidity risks reinforcing each other, ultimately contributing to debt distress. Ghana defaulted on its debt obligations in 2022 and sought IMF support, triggering the Economic Credit Facility (ECF) program.
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