World Bank Lists Ghana Among 10 Countries With High Debt Risk Exposure In The World

Ghana has been named among the list of countries with high debt risk exposure by the World Bank.

This was revealed in the International Development Association (IDA) financial statement, which was among the World Bank FY21 audited financial statements released on Monday, August 9.

Ghana was 9th on the list, with India topping the list. Other African countries on the list are Nigeria, Ethiopia, Kenya, Tanzania and Uganda

List Of IMF’S Countries With High Debt Risk Exposure

  1. India with $22 billion IDA debt stock
  2. Bangladesh with $18.1 billion IDA debt stock
  3. Pakistan with $16.4 billion IDA debt stock
  4. Vietnam 14.5 Billion IDA debt stock
  5. Nigeria with 11.7 Billion IDA debt stock
  6. Ethiopia with $11.2 Billion IDA debt stock
  7. Kenya 10.2 Billion IDA debt stock
  8. Tanzania with 8.3 Billion IDA debt stock
  9. Ghana with 10.6 Billion IDA debt stock
  10. Uganda with 10.4 Billion IDA debt stock

The financial statement reads in part: “IDA faces two types of credit risk: country credit risk and counterparty credit risk.

 “Country credit risk is the risk of loss due to a country not meeting its contractual obligations; and counterparty credit risk is the risk of loss attributable to a counterparty not honoring its contractual obligations.

“IDA is exposed to commercial as well as noncommercial counterparty credit risk.”

 It stated, “As of June 30, 2021, the 10 countries with the highest exposures accounted for 66 per cent of IDA’s total exposure.”

Ghana’s Public Debt Stock

Ghana’s public debt stock shot up by ¢27.8 billion in April 2021 and May 2021 to ¢332.4 billion, the latest Summary of Economic and Financial Data by the Bank of Ghana has revealed.

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This is equivalent to $57.9 billion, about 76.66 per cent of Gross Domestic Product.

In March 2021, the total debt stock stood at ¢304.6 billion, and the significant increase in the debt stock is due to the $3 billion Eurobond raised in March 2021 as well as the huge borrowing on the domestic market.

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In April 2021, the public debt stock was ¢328.0 billion. This means ¢23.4 billion new debt was added to the total debt stock.

The domestic debt went up by ¢7.2 billion to ¢170.8 billion at the end of May 2021 despite some under subscription of Treasury bills sale. This is equivalent to 39.4% of GDP.

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The external debt also went up by $3.5 billion (¢20.3 billion) to $28.1 billion. This is approximately 37.2% of GDP.

However, the financial sector debt stood unchanged at ¢15.2 billion, equivalent to 3.5% of GDP.

But the debt could go down if assets of defunct banks are retrieved quickly to offset part of it.