LATEST TWEET:
Great stuff from our supporter @stpennells in the MEN on #Carillion and how it links to the issue of the UK governm… https://t.co/A7FYlarcpA
RT @HealthPoverty: Carillion has showed how disastrous public-private partnerships are in the UK. But this government is exporting them to…
RT @Debt_Ireland: The New Debt Crisis - A free event from DDCI on the looming debt crisis in the Global South, and the impacts it is alread…
UK audit office finds #PPPs in the UK cost 40% more than alternatives https://t.co/aEAScWJeUv Yet the UK continues… https://t.co/ZdVuizILhu
The #Carillion collapse has put bad value PFI deals, and the debts they can create, back in the spotlight https://t.co/aEAScWJeUv
Join the movement

Ghana debt payments on the rise

Payments could reach 30 per cent of government revenue in 2020s.

Independence Square, Ghana (Credit: CC Chapman)

Independence Square, Ghana (Credit: CC Chapman)

Ghana has recently been judged by the IMF and World Bank to be at moderate risk of not being able to pay debts. The government’s foreign debt fell from $6 billion in 2005 (over 60 per cent of GDP) to $2 billion in 2006 (10 per cent of GDP), after qualifying for some debt cancellation in 2004 and 2005. Despite a booming economy, the debt has increased rapidly to $10 billion in 2013 (23 per cent of GDP).

The biggest concern over Ghana’s debt is the cost of its debt payments. Assuming economic growth of 5-8 per cent a year, annual foreign debt payments are still projected to reach 15 per cent of government revenue by 2020 and over 20 per cent by the mid-2020s. In the event of one economic shock, debt payments are projected to be as high as 30 per cent of government revenue by the mid-2020s, well above the relative level of payments in the period before Ghana qualified for debt cancellation. The IMF claims that governments historically begin to default on debt payments once they reach the range of 20-30 per cent of revenue.

Once again, the biggest group of lenders to Ghana have been multilateral institutions, with 40 per cent of foreign loans between 2006 and 2011. Most of this is lending by the IMF and World Bank, which by themselves are responsible for 35 per cent of lending to the West African country. Private lenders were responsible for 34 per cent of loans, and foreign governments 27 per cent. Private lenders are predicted to be a much larger source of loans in coming years.


Countries

Ghana
Jubilee Debt Campaign is a company limited by guarantee, number 3201959
Jubilee Debt Campaign's registered charity number is 1055675