Head of African Research at Standard Bank Group Ltd, Jibran Qureishi
Ghana to face debt risk in next 2 years, Standard Bank report
Ghana’s debt sustainability requires sharper focus, Jibran Qureishi
Ghana among ‘fragile five’ indebted nations in Africa, Standard Bank report
Head of African Research at Standard Bank Group Ltd, Jibran Qureishi, has indicated that Ghana must go for an International Monetary Fund (IMF) bailout to restore investor confidence.
Jibran Qureishi explained that it will be difficult for Ghana to improve its current fiscal position without the IMF because its revenue estimates are too ambitious, therefore, cutting down its expenditure would be difficult.
According to a Bloomberg report, it attributed the difficulty in cutting down expensiture to public-sector wages and debt-service costs accounting for more than half of its expenditure.
Mr Qureishi further stated that given Ghana’s debt situation, it would need a premium over U.S. treasuries of more than 1,000 basis points for investors to regain confidence in the international bonds it issues.
Jibran Qureishi added that, because China is unwilling to loan funds to African countries, Ghana’s main hope to improve its fiscal position is the IMF.
A study conducted by Standard Bank Group Limited has shown that Ghana is part of the ‘fragile five’ indebted nations in Africa.
According to the study, the five fragile economies which include Kenya, Angola, Ethiopia and Zambia will face debt risks over the next two years.
The report also said Ghana’s debt risk increased due to the country’s worsening public finances.
Standard Bank also disclosed that the study which covered 18 countries also showed that Uganda was the African continent’s brightest star in 2022 in terms of debt management.
The head of African research at Standard Bank Group Ltd, is reported to have told Bloomberg that, “Debt sustainability (of these five countries, including Ghana) now requires sharper focus.”