Claim: A member of the opposition NDC Communications team, Beatrice Annan, says Ghana’s public debt to GDP ratio is 104%.
Verdict: This was found to be misleading. Economic and financial data available to DUBAWA had shown that as of January 30, 2023, the country’s debt-to-GDP ratio was 93.5%, representing a 17.6% increase from the 75.9% recorded in September 2022.
Full Text
A Communications team member of the opposition National Democratic Congress (NDC) says the ratio of Ghana’s public debt to its gross domestic product stands at 104%.
Commenting on the 2023 General Elections held in Nigeria on the Good Morning Ghana show on Accra-based Metro TV on February 27, 2023, Beatrice Annan said the macroeconomic situation in Ghana could not be compared to its West African neighbour.
“So, when APC [Nigeria’s All Progressives Congress] is campaigning, are they saying that their debt to GDP is 104% as we have in Ghana? No!” she quizzed.
The video clip shared on Good Morning Ghana’s YouTube channel starts from minutes 22:29 to 22:58.
As of March 5, 2023, data available on YouTube showed that the video had been viewed 6,826 times.
In view of the renewed economic debate in Ghana due to its recent economic challenges, DUBAWA decided to investigate the claim to determine its accuracy.
Verification
DUBAWA reviewed economic and financial data published by the Bank of Ghana, Ghana Statistical Service, and the Ministry of Finance and Economic Planning in its investigation of the claim.
According to Cornell University, a private research university in America, the term “debt to GDP ratio” means the percentage one obtains by dividing the level of a country’s total public debt or net public debt by the gross domestic product.
The Organisation for Economic Cooperation and Development (OECD) has defined Gross domestic product (GDP) as the “standard measure of the value added created through the production of goods and services in a country during a certain period.”
Ghana’s total public debt stock as of November 30, 2022, was GHS575.7 billion, the January 2023 edition of the Summary of Economic and Financial Data published by the Bank of Ghana shows. This new debt figure, the central bank had noted, brings the country’s debt-to-GDP ratio to 93.5%. Refer to page 7 of the Bank of Ghana’s report.
Page 7 of the report published by the Bank of Ghana.
Also, data available at the Ministry of Finance and Economic Planning showed that the country’s debt-to-GDP ratio as of September 2022 was 75.9%, representing a 0.8% increase from the 76.7% recorded at the end of December 2021. Please refer to paragraph 36 of page 12 of the approved 2023 Ghana Government Budget.
The 93.5% reported by Ghana’s central bank as the country’s debt-to-GDP ratio represented a 17.6% increase from the 75.9% recorded in September 2022.
The World Bank had projected Ghana to record a 104.6% debt-to-GDP ratio by the end of 2022. Please refer to pages 8 and 35 of the October 2022 Africa Pulse Report published by the World Bank.
However, economic and financial data from the Bank of Ghana and the Ministry of Finance and Economic Planning have shown that Ghana’s debt-to-GDP ratio had not risen beyond 100% between 2021 and 2022.
When contacted to confirm her source of the 104% debt to GDP ratio, Madam Beatrice Annan, a private legal practitioner, told DUBAWA she relied on the projection by the World Bank because she considered the data presented by Ghana’s central bank to be inexhaustive.
The response of the NDC Communications team member to DUBAWA’s inquiry
In light of the recent data published by the Bank of Ghana and the Ministry of Finance on the subject, it will, therefore, be misleading for anyone to use a 104% debt-to-GDP projection by World Bank in October 2022 to describe Ghana’s debt to GDP in February 2023. For instance, the World Bank projected a 0.5% GDP growth rate for Ghana in 2020. However, the country recorded a 1.1% GDP growth rate in 2020, as acknowledged by this World Bank document.
Again, research institution Statista, an online platform specialising in market and consumer data, has projected Ghana’s debt-to-GDP ratio to be around 87.76% by the end of December 2023.
According to the research firm, the ratio of Ghana’s debt to GDP is forecast to increase between 2022 and 2027 by 2.7 percentage points. “This overall increase does not happen continuously, notably in 2023. The ratio is estimated to amount to 93.47% in 2027,” the firm, which offers statistics and reports, market insights, consumer insights and company insights, has said.
Conclusion
Ghana’s public debt to GDP ratio is not 104%, as the NDC Communications team member claimed.
Rather, economic and financial data from the Bank of Ghana, and the Ministry of Finance and Economic Planning, have shown that the country’s debt-to-GDP ratio is 93.5%, subject to revision.
