Oct 14, 2018

The big picture: Ghana's rising debt

A particularly gruesome example of overindebtedness can be found in West Africa.

Expand chart
Data: Jubilee Debt Campaign; Chart: Andrew Witherspoon/Axios

The details: Ghana's foreign-currency debts are rising. The current IMF program, which began in 2015, projected external debt of 40% of GDP this year and total debt of 61%. The actual numbers look more like 46% and 71%, respectively.

  • Its government revenues are flat: In 2014, before the IMF program started, they were 17.8% of GDP. They were meant to rise to 20.3% this year, but instead they have fallen slightly, to 17.6%.
  • Its currency is in free fall: Government revenues are in Ghanaian cedis. It now takes roughly 5 cedis to buy $1, up from 2.5 cedis at the beginning of 2014.

The bottom line: In 2018, a majority of Ghana's government revenues will be spent just on servicing the country's foreign-currency-denominated debt, per the Jubilee Debt Campaign.

  • With all those revenues leaving the country, there's much less left over for Ghanaians: Real domestic government expenditure has fallen from 820 cedis per person in 2013 to just 680 cedis per person last year. No wonder growth is anemic.
  • Ghana is an extreme example of what's happening in Africa more broadly: On average, African countries spent 11.8% of their revenues on external debt payments last year, a number that has more than doubled in the past five years.

The big question: What will happen when the current IMF program ends in April? New loans, from the IMF or anybody else, are unlikely to be the answer when the problem is that Ghana already has too much debt.

Go deeper

In photos: Authorities issue warning as Americans venture out for Memorial Day weekend

Venice Beach in Los Angeles on May 24. Photo: David McNew/Getty Images

Authorities urged Americans to maintain social distancing and wear masks against the coronavirus amid reports of packed beaches and bars during the Memorial Day weekend.

Driving the news: Law enforcement stepped up beach patrols, authorities on Florida's Gulf Coast closed parking lots because they were full and there were crowded scenes at Lake of the Ozarks bars in Missouri, per AP, which reports a shooting injured several people at a packed Daytona Beach in Florida.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9:30 p.m. ET: 5,405,029 — Total deaths: 344,997 — Total recoveries — 2,168,408Map.
  2. U.S.: Total confirmed cases as of 9:30 p.m. ET: 1,642,021 — Total deaths: 97,698 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 1 hour ago - Politics & Policy

Republicans sue California over mail-out ballot plan

California Gov. Gavin Newsom during a February news conference in Sacramento, California. Photo: Justin Sullivan/Getty Images

President Trump accused Democrats of trying "Rig" November's general election as Republican groups filed a lawsuit against California Sunday in an attempt to stop Gov. Gavin Newsom (D) from mailing ballots to all registered voters.

Driving the news: Newsom signed an executive order this month in response to the coronavirus pandemic ensuring that all registered voters in the state receive a mail-in ballot.