Ghana’s Debt Profile and Sustainability

“The profile and sustainability of Ghana’s debt are assessed for the period 2000-12. The assessment was based on debt-to-GDP ratios and the fiscal approach to debt sustainability, which can only provide backward-looking analysis. The dearth of debt data did not permit the use of the traditional forward-looking approaches based on NPVs. The results found Ghana’s
debt to be unsustainable during 2000-2002/03 and sustainable during 2004-2012. The results are generally consistent with those obtained for Ghana by the IMF and World Bank under the HIPC and new Debt Sustainability Framework (DSF). The study stresses the importance of keeping the fiscal deficit under control to serve as a policy buffer and macroeconomic stability
anchor and using borrowed resources judiciously to generate growth in order to maintain long-term debt sustainability.
The objective of this study is to analyze the dynamics of Ghana’s debt and assess its sustainability, to the extent that data will permit.”