Ghana will end the year without making significant progress in reducing its debt-to-GDP ratio, that's coming from the IMF
This development was revealed by the IMF’s Fiscal Monitor report released on the sidelines of the annual Spring meetings in Washington DC.
Based on some new debt management strategies introduced by the government of Ghana, the country was hoping to see its debt-to-GDP of about 70 percent reduced.
READ ALSO: Ghana Public debt stands at 72.5% of GDP
However, IMF is forecasting 71.7 percent by the end of the year.
This forcast is a little bit lower than the 72.4 percent recorded for 2016.
The development is making analysts doubt the strength of the new strategies government is implementing reduce the public debt significantly.
The country’s debt stock as a percentage of the total value of the economy over the years has been a concern for the country’s development partners, donors, and rating agencies because of its impact government expenditure, the cost of credit, economic growth.
The 2017 budget of Ghana says government is planning to spend a little over GH10 billion cedis as interest payment for loans.
The country's rising debt stock has seen the IMF classify Ghana as high risk of debt distress.
As at December 2016 the country's debt stock stood at GH122 billion
A Ghanaian economist has forecast that the country's debt-to-GDP ratio will peak at 72 per cent this year due to an International Monetary Fund (IMF) bailout, but decline to 58 per cent in 2019, before tapering off within two decades.
"For purposes of comparison, under the current Ghana-IMF programme, the debt-to-GDP ratio is forecast to peak at 72% in 2015".
John Kwakye, an economist with the Ghana's Institute Of Economic Affairs, a policy think tank.
However, Kwakye expressed confidence that the ratio could fall to 58 per cent by 2019 and further to 39 per cent by 2034 based on what he described as "progressive fiscal consolidation and continued decline in the fiscal deficit".