International Credit Ratings Agency, Moodys is projecting that Ghana’s debt to GDP ratio may likely hit 80% by the end of the year. This was contained in the firm’s Outlook report for sub-Saharan Africa,2021.

Ghana’s current debt to GDP ratio has already crossed the 70% mark, placing the country in the high debt distress category, with increasing threat to economic stability.

“We expect most SSA sovereigns to see their debt burdens rise further in 2021. The average debt burden in the region will hover around 64% of GDP in the near to medium term compared to the 47% average in 2015-19”, Moody’s said.

“We do not expect debt burdens to come down in the foreseeable future as revenue generation capacity remains weak”, it added.

The international rating agency said the country will be ranked second in Sub Saharan Africa with the greatest External Vulnerability Stress pressures.

“In SSA, higher external vulnerability indicators – which are a measure of short-term debt and upcoming external debt maturities against international reserves – will be more challenging for sovereigns outside of monetary unions. Zambia and Ghana will see the greatest EVI pressures, with 2021 levels forecast to be 509% in Zambia and 143% in Ghana”.

In spite of recent growth prospects, the debt burden is expected to rise further, as Ghana’s borrowing is extremely high compared to its peers on the continent.

With domestic revenue mobilization expected to remain low, the repayment of loans will become a test case for the country.

Ghana’s Central Bank Governor has called for tougher measures to improve the financial economy that is widening the tax net to raise enough revenue and at the same time exhibit prudence in spending as well as reducing the appetite for borrowing.

Moody’s also said currency depreciation will add to the cost of debt loads and lower debt affordability. More than 50% of Ghana’s debt is held by external investors.