The stock of Ghana's public debt stood at GHC25.8 billion at the end of April this year, increasing from the GHC24 billion recorded at the end of 2011. In relation to gross domestic product (GDP), the total public debt increased from 42. 6 per cent at the end of December 2011 to 42. 7 per cent at the end of April 2012.

The domestic component of the public debt was GHC12.6 billion in April this year while the foreign component was US$7.8 billion. These figures were disclosed by the Monetary Policy Committee (MPC) after its latest meeting in Accra.

A report prepared by the International Development Association (IDA) and the International Monetary Fund (IMF), and released on May 12, 2011 indicated that given the risks to the fiscal outlook and the potential external spillovers of a less favourable fiscal outcome, Ghana's risk of external debt distress is assessed to remain at a moderate level, unchanged from the 2010 debt sustainability assessment.

However, Ghana's debt burden indicators have improved since the June 2010 assessment. External debt burden indicators are projected to remain well below their respective indicative thresholds, provided that the programmed fiscal consolidation is achieved and external public sector borrowing is restrained. At the same time, overall public sector debt is projected to increase moderately in relation to GDP over the long term. If the planned fiscal consolidation is achieved without a substantial further debt build-up, an improved rating of low risk of debt distress could be considered in a future assessment.

Public debt at the end of 2010 was higher than in the 2010 Debt Sustainability Analysis (DSA). Total public debt at end-year was estimated at 39 per cent of GDP, one percentage points higher than projected in the 2010 DSA. This reflected a larger-than-programmed fiscal deficit and associated increases in domestic financing.

The government continued to accumulate domestic payment arrears in 2010. At the end of the year, the outstanding stock of arrears and public liabilities in respect of SEO debts was estimated at nine per cent of GDP, which was not reflected in the public debt data. About one-third of these liabilities would be cleared in 2011 through a two-to-one mix of cash payments and bond issues. This element of arrears therefore added to the debt balance at the end of 2011. The residual arrears balance is assumed to be regularised through cash outlays or bond issues in 2012-13, adding to the debt burden over this period.

Ghana's external debt stock had risen substantially since its Multilateral Debt Reduction Initiative (MDRI) programme. External debt totalled US$6.1 billion at the end of 2010, up from US$2.1 billion in 2006 after debt relief under the MDRI. The increase largely reflects borrowing from bilateral and multilateral institutions, including under the IMF's Extended Credit Facility (ECF) programme. Non-concessional borrowing includes Ghana's first US$750 sovereign bond issued in 2007, which matures in 2017. Subsequently, commercial borrowing has been at a more modest pace.

According to the government, gross public debt (comprising public external debt, US$4,644.2, and domestic debt, GHC5,308.2) rose by about US$458.7 million to US$8,517.7 million at the end of September 2009, largely as a result of an increase in external debt. This raised the debt burden from 48 per cent of GDP at the beginning of 2010 to 59.7 per cent of GDP as at the end of September 2009 and close to the limit of 60 per cent set in the budget as the long-term target.