Ghana has been named among 18 countries with high risk of debt distress in Africa in a report released by the World Bank Group on Analysis of Issues Shaping Africa’s Economic Future.
The 100 paged report documented the Recent Trends and Developments, Emerging Fiscal and Debt Risks in Sub-Saharan Africa, Electricity Access and Economic Development: Options for Accelerating Progress in Sub-Saharan Africa.
According to the report, under the Emerging Fiscal and Debt Risks in Sub-Saharan Africa section, the number of countries with high risk of debt distress increased from 8 in 2013 to 18 in March 2018.
“Larger fiscal deficits are contributing to rising public debt levels in the region, among other factors. From 2013 onward, the dynamics and composition of public debt changed significantly. Public debt increased from an average of 37 percent of gross domestic product (GDP) in 2013 to 56 percent in 2016, with more than two-thirds of the countries experiencing an increase of more than 20 percentage points.
Debt sustainability risks in the region have increased significantly over the past few years, with 18 countries at high risk of debt distress as of March 2018, compared with eight in 2013.”
Dr. Albert G. Zeufack who presented the findings of the report to a room filled with journalists from different parts of Africa indicated that although a number of countries in West Africa had increased their economic growth, their debt to GDP ratio was still quite high.
He further noted that general economic growth in Africa has rebounded but stressed that it was not a time to rejoice since it was at a slow pace. “…this growth rate of 3.1percent in 2018 is still not enough. We’re still very far from the growth rate Africa experienced before 2014 before the collapse in commodity prices. This is still not enough because we’re just slightly above our population growth rate of 2.7 percent. To significantly eradicate poverty or to do so in a foreseeable future, we need to speed up our growth rate…” he noted.
The other countries in with the high risk of debt distress include Burundi, Cameroun, Cape Verde, Central African Republic, Chad, Djibouti, Eritrea, Ethiopia, Gambia, Mauritania, Mozambique, South Sudan, Sudan, Togo, Zambia and Zimbabwe.