The First Deputy Governor of the Bank of Ghana Maxwell Opoku-Afari says the central bank will among other things prioritize the management of exchange rate volatilities in the country to limit its impact on the country’s debt to GDP ratio.
According to the latest International Monetary Fund (IMF) fiscal Monitor Report, Ghana’s total debt stock as percentage of its GDP should hit 61.99 percent by the end of 2019.
Ghana’s external debt component is negatively impacted any time the cedi depreciates.
Commenting on efforts being made to keep Ghana’s debts at an acceptable level, Mr. Opoku-Afari said government was hopeful that the recent projected growth by the World Bank and the IMF will assist in keeping the country’s debt at a manageable level.
“There are so many factors that go into debt dynamics. At the moment at 62 % of GDP, we have to look at what the components are. We can see for example the impact of growth on debt. As the country grows the debt-to-GDP ratio comes down. We can also see the impact of exchange rate developments on debt. So we have to keep exchange rate issues under control. The interest rate at which you borrow also impacts significantly on your debt,” he said.
According to Opoku-Afari, the IMF and World Bank’s predictions show that Ghana may experience some growth in the medium, a development that could reduce the impact of the debt levels if fiscal stability is maintained.
Mr. Opoku-Afari was speaking on the sidelines of the Africa launch of the IMF 2019 Economic Outlook Report in Accra.