On the back of over 60% cedi appreciation in December
Public debt drops by GH¢141.1 billion in December 2022 to end the year at GH¢434.6 billion on the back of over 60% cedi appreciation.
This is approximately 71.2% of Gross Domestic Product (GDP).
Data from the Bank of Ghana (BoG) has revealed that the total public debt is equivalent to $52 billion.
The Summary of Economic and Financial Data released by BoG for May 2023 shows that Ghana’s debt in cedi term rose consistently to GH¢575.7 billion ($43.9 billion) at the end of November 2022, representing about 93.5% of GDP.
Public debt drops
But, it has declined significantly to GH¢434.6 billion in December 2022.
External debt declined from GH¢382.7bn to GH¢240.2bn
Per the data, eternal debt dropped from GH¢382.7 billion in November to GH¢240.2 billion in December 2022.
Domestic debt up from GH¢193.1bn to GH¢194.4bn
In terms of the domestic debt, it increased slightly from GH¢193.1 billion to GH¢194.4 billion at the end of December 2022, representing about 31.9% of GDP.
Cedi down by 54.2% by end of November 2022
The cedi witnessed 54.2% year to date depreciation by the end of November 2022.
Cedi appreciates by 63.7% in December 2022
However, the cedi made significant recovery against the US dollar as of the mid-December – appreciating by 63.7%.
Domestic Debt Exchange Programme
The reduction in the debt comes after the completion of a successful Domestic Debt Exchange Programme (DDEP) for cedi denominated notes and bonds issued by the state, the Energy Sector Levy Act (E.S.L.A. Plc.) and Daakye Trust Plc.
It involves the swapping of short-dated bonds that had an average coupon rate of 19% for long-dated ones with yields averaging nine per cent.
Under the programme, government managed to restructure bonds to the tune of GH¢87.76 billion.
$3bn IMF bailout
The debt operation was a prerequisite for $3 billion International Monetary Fund (IMF) programme.
Per the data, the fall in the total public debt in December 2022 was primarily due to the Domestic Debt Exchange Programme and some gains by the cedi against the dollar during the period.
In December 2022, Ghana suspended all debt service payments under certain categories of external debt, pending an orderly restructuring of the affected obligations.
This suspension includes payments on Eurobonds; commercial term loans; and on most of bilateral debt.
This suspension did not include the payments of multilateral debt, new debts (whether multilateral or otherwise) contracted after December 19 2022 or debts related to certain short term trade facilities.
Ghana’s external debt restructuring is targeting $10.5 billion in debt service relief from 2023 to 2026.
The government is seeking to restructure debts totalling $14 billion, out of which $13 billion are in bonds with its external commercial creditors.
Government is expected to begin debt restructuring negotiations with its bilateral creditors in a bid to restructure debts of about $5.4 billion.
The report did not provide data for the financial sector resolution debt and other liabilities such as the energy sector debt.
Nominal GDP surge GH¢262.9bn in March 2023
Ghana’s nominal GDP rose by GH¢262.9 billion to GH¢873.1 billion in March 2023 following elevated prices of goods and services produced due to persistently high inflation rates
Fiscal deficit to GDP stood at 0.8% in March 2023
The data shows that fiscal deficit to GDP stood at 0.8% in March 2023, as against 8.3% of GDP in December 2022.
The primary balance stood at 0.1% of GDP in March 2023.
The cedi lost about 21.7% in value to the US dollar on the interbank forex market as of May 2023.
The depreciation of the cedi in January 2023 (20.6%), February 2023 (22.1%), March 2023 (22.1%) and April 2023 (21.7%) were not slightly different from that of May 2023.