Ghana’s Debt To GDP Ratio Is 8th Highest In Sub-Saharan Africa
Ghana has the 8th highest Debt to GDP ratio in Sub-Saharan Africa. That’s according to data published by Statista as at December 2021. Although the exact figures of these countries’ public debts were not disclosed, the percentage of debt to GDP clearly indicates a worrying trend in the public debt stock across the continent.
According to estimates, the general government debt in Eritrea amounted to 175 percent of the country’s Gross Domestic Product (GDP) in 2021. This was the highest debt-to-GDP ratio measured in Sub-Saharan Africa. Cabo Verde and Mozambique followed. In each of them, the national debt was measured at 161 percent and 134 percent of GDP, respectively. The figures included debts of the state, communities, municipalities, and social insurances. The rest are Angola, Mauritius, Zambia, and the Republic of Congo scored 104%, 101%, 101%, and 85.4% respectively. Ghana came 8th with 83.5%.
Other countries like the Gambia, Seychelles, Guinea Bissau, Rwanda, Burundi, Gabon, Senegal, Sierra Leone all had a debt to GDP figure lower than that of Ghana (between 82% and 71%).
Again, countries such as Nigeria, South Africa, Kenya, Algeria, and Ethiopia also recorded lower debt to GDP ratios of (35.7%), (64.4%), (69.7%), (56.04%), and (57.1%) respectively.
What is significant is that these countries also have GDP growth between 500 and 90 billion dollars, far higher than that of Ghana’s 74 billion dollars, with Nigeria having the highest GDP growth of 500 billion dollars.
Experts say by comparing what a country owes with what it produces, the debt-to-GDP ratio reliably indicates that country’s ability to pay back its debts. Often expressed as a percentage, this ratio can also be explained as the number of years needed to pay back debt if GDP is dedicated entirely to debt repayment.
A recent World Bank report showed that more than half of the world’s low-income countries, most of which are in Africa, are either currently grappling with debt distress or at risk of doing so. This is according to a blog post that was recently published on the World Bank’s website.