The International Monetary Fund (IMF) says it is more important now than ever, that Ghana balances its developmental spending needs against the rate of debt accumulation by the country.
Ghana’s debt to GDP ratio crossed the dreaded 70% threshold back in September 2020 and is expected to hit 81.5% by the end of this year according to projections by the IMF.
The April 2021 Fiscal Monitor report of the Bretton Woods institutions anticipates a further worsening of the country’s debt situation with the debt to GDP ratio expected to grow to 86.6% by 2025.
Speaking on Ghana’s growing debt situation during the April 2021 Virtual Spring Meetings Regional Economic Outlook Press Briefing on Sub-Saharan Africa, the Director of the African Department at the IMF, Abebe Aemro Selassie, noted that Ghana needs to ensure that the country’s debt sustainability doesn’t get out of hand.
“On debt, our engagement is in the context of Article IV policy discussions. We give our advice on what we think are the kinds of reform that Ghana needs to ensure sustained development progress. It’s even more important now for Ghana to strike a healthy balance between the need to continue to address its development spending needs, but also making sure that debt sustainability doesn’t get out of hand.”
“So, how to calibrate this balance is something that we discussed with the Government. But ultimately it is up to the Government, of course, to come up with the policies that are needed and to take decisions,” he added.