Ghana’s debt service-to-revenue ratio reached all-time high of 127% in 2020, highest in SSA – IMF

Ghana’s debt service-to-revenue ratio reached a record 127% in 2020, the highest in Sub-Saharan Africa and among the highest globally, according to the IMF. This was driven by the COVID-19 pandemic and culminated in a debt default.

By 2022, the ratio declined to 117.5% due to increased government revenues from post-pandemic economic recovery and inflation.

Before the external debt service suspension in December 2022, private external creditors constituted 69% of external debt service payments, followed by bilateral creditors at 20%.

Gross financing needs (GFN) peaked at 19.5% of GDP in 2022, easing in 2023 due to the suspension.

Domestic debt surged from 24% of GDP in 2019 to 50% by 2022, with rising borrowing costs and shorter maturities. Domestic debt service accounted for 81.7% of the public debt burden in 2022. Since the restructuring, Ghana has relied on multilateral financing and treasury bills for funding.