According to a Bloomberg analysis, Ghana is placed second among countries with the biggest debt default risk in 2022.
In the Sovereign Debt Vulnerability Ranking, the country is closely followed by El Salvador (ranked first).
According to Bloomberg, Ghana’s debt to GDP is expected to reach 84.6 percent by the end of this year.
This means that the country’s debt would have topped $400 billion well before the end of 2022.
Ghana’s interest expense to GDP is anticipated to reach 7.2 percent in 2022, the highest among the 25 countries tracked by Bloomberg.
This means the two countries will spend more money to service their debts in 2022
Already, the International Monetary Fund has warned that more than 30 percent of emerging and developing countries are in or near debt trouble, with developing economies accounting for 60 percent.
According to Bloomberg, Tunisia ranks third among countries at risk of debt default, with a debt-to-GDP ratio of 87.3 percent.
Pakistan is fourth, Egypt is fifth, Kenya is sixth, Argentina is seventh, Ukraine is eighth, Bahrain is ninth, and Namibia is tenth (10th).
Prior to the government’s statement that it would seek IMF assistance, Ghana’s situation was perilous since investors considered the Ghanaian economy as hazardous, raising the yield on Ghana’s Eurobonds.
However, following the government’s statement that it will seek economic assistance from the IMF, markets have returned to normalcy, with interest rates being largely stable, though there are still some concerns regarding the foreign exchange market.