In line with the growth and development objectives of Government, Ghana will ensure that the stock of debt remains sustainable.

Indications from a recently conducted Debt Sustainability Analysis (DSA) show that Ghana’s external debt is sustainable under the new Low Income Countries Debt Sustainability framework in the long term. The analysis revealed that the Present Value of Debt to exports (PV/XGS) and to-Domestic Budget Revenue (PV/DBR) was 50.5 per cent and 89.1 per cent, respectively, in 2006. This new framework is based on policy dependent threshold that are applied using the Country Policy and Institutional Assessment (CPIA).

Ghana is currently classified as a strong performer and, therefore, sustainability would be determined based on the strong term threshold (see Table 9). It is our objective to maintain this position to take advantage of the leverage of borrowing more to finance the PIP.

LIC External Debt Sustainability Thresholds

Source:  Ministry of Finance / 2007 Budget, Ghana