Percentage point increase in debt to GDP in 2020 is the lowest since 2013

Data in Table 1 indicate the percentage point increase in debt-to-GDP ratio recorded by Ghana in 2020 remains the lowest since 2013. The respective highest percentage points increase in Ghana’s debt-to-GDP ratios were recorded in 2014 (7.94%) and 2013 (7.64%). The average percentage points increase in Ghana’s total debt accumulation from 2017 through 2020 is 1.59% ((0.15% + 2.02% + 3.72% + 0.45%) ÷ 4 = 6.34% ÷ 4 = 1.585 = 1.59%). This is significantly lower than the average rate of accumulation (5.39%) from 2013 through 2016. The average rate of debt accumulation from 2017 through 2020 is about 3.39 times (5.39% ÷ 1.59% = 3.38994 = 3.39 times) lower than the average accumulation rate from 2013 through 2016.

Table 1:                  Percentage Point Increase in National Debt to GDP – 2012 – 2020

YearTotal Debt in US$ BillionsDebt-to-GDP %Percentage Point Increase
201220.0935.58
201327.3543.227.64
201427.2051.167.94
201526.6454.833.67
201631.4257.12                     2.29 – Av = 5.39
201733.7957.270.15
201838.8359.292.02
201939.5763.013.72
202041.4263.46                     0.45 – Av = 1.59

Sources: Countryeconomy.com; Statista.com; Tradingeconomics.com (2020)

In Table 2, Ghana’s accumulated debt to gross domestic product’s (GDP’s) ratio for 2019 is estimated at 63.01%. Some economic pundits consider this ratio to be high. However, it compares favourably with debt-to-GDP ratios recorded by the advanced, emerging, and developing economies listed in the table.

Table 2:                           Debt-to-GDP Ratios for Selected Economies – 2018 – 2019

CountryDebt-to-GDP %
Japan238.00
Greece177.00
Lebanon151.00
Italy135.00
Singapore126.00
Cape Verde124.00
Portugal118.00
Angola111.00
Mozambique109.00
United States107.00
Djibouti104.00
France98.10
Cyprus95.50
Spain95.50
Egypt90.00
Canada89.70
Gambia81.80
United Kingdom80.70
Mauritania79.00
Brazil75.79
Sao Tome and Principe73.10
India69.62
Tunisia71.40
Ghana63.01*

Source: Tradingeconomics.com (2020); *Ghana’s debt-to-GDP ratio for 2019 was computed based on available data on total debt (GH¢218 billion) and total GDP (GH¢346 billion) for 2019.

Dr. Ebenezer Ashley,

Chartered Economist/ Business Consultant.

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