According to the 2024 United Nations report Unpacking Africa’s Debt, Ghana allocated 42% of its revenue to debt servicing between 2017 and 2022. This reflects a significant increase compared to the 2010–2016 period, during which 27% of revenue was used for the same purpose. The 15-percentage-point rise highlights growing fiscal challenges faced by the country.

Data from Ghana’s Ministry of Finance reveals a sharp rise in interest payments over the years. While GH¢36 billion was spent on debt servicing between 2010 and 2016, this figure surged to GH¢152 billion during the 2017–2022 period. In total, Ghana spent GH¢189 billion on debt servicing from 2010 to 2022, with 81% of this amount paid during the latter five years.

Within the same period, the lowest interest payment was recorded in 2010 at GH¢1.44 billion, while the highest was GH¢45.69 billion in 2022, according to the Ministry of Finance.

The UN report also highlights the consequences of this debt burden, noting that the rising cost of debt servicing significantly reduced government spending on public services. This financial strain led to Ghana being classified as one of the 10 most debt-distressed countries globally.

Further compounding the fiscal challenges, the International Monetary Fund (IMF) reported that Ghana’s debt-to-revenue ratio reached a record 127% in 2020, the highest in Sub-Saharan Africa at the time. Although this ratio declined to 117% by 2022, Ghana was forced to default on its external debts that year, prompting the restructuring of both domestic and foreign debt.

Source: TheDotNews