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Visual Capitalist latest report shows that, Ghana is now placed second on its list of countries with the highest default risk in 2022. Only four countries, namely, Ukraine 10,856 basis points (bps), Argentina (4,470), El Salvador (3,376), and Ethiopia (3,035) have a credit default swap spread that is higher than Ghana’s at 2,071 bps.

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Another metric pointing to Ghana’s likely default is the country’s interest expense as a percentage of the gross domestic product (GDP). According to Visual Capitalist data, with a share of 7.2%, Ghana’s interest expense ratio is the second-highest in the world behind only that of Egypt (8.2%).

Furious borrowing has seen Ghana’s debt-to-GDP ratio soar to almost 85%. Its currency, the cedi, has lost nearly a quarter of its value this year and it was already spending over half of tax revenues on debt interest payments. Inflation is also getting close to 30%.

Also Read: Ghana Inflation Hits 27% High For The First Time In 18 Years.

When these metrics are combined with the country’s debt as a percentage of the GDP of 84.6%, and a government bond yield of 17.1%, Ghana, which finally agreed to seek the International Monetary Fund (IMF)’s help, looks destined to follow in the footsteps of Sri Lanka, which defaulted on its obligations in May.

Meanwhile, according to the Visual Capitalist rankings, Tunisia is the African country with the next highest default risk in 2022 and is followed by Egypt. Globally, Tunisia is ranked third while Egypt and Kenya are ranked fifth and sixth, respectively. Completing the top ten countries with the highest default is Namibia.

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