Ghana Ranked as Country With Second-Highest Debt Default Risk Globally

According to Visual Capitalist, Ghana is present placed 2nd connected its database of countries with the highest default hazard successful 2022. Only 4 countries, namely, Ukraine 10,856 ground points (bps), Argentina (4,470), El Salvador (3,376), and Ethiopia (3,035) person a recognition default swap dispersed that is higher than Ghana’s astatine 2,071 bps.

El Salvador Has Highest Default Risk

After seeing ostentation surge to implicit 29% successful June, Ghana, West Africa’s second-largest economy, is present ranked arsenic 1 of the countries astir apt to default this year, Visual Capitalist’s latest sovereign indebtedness vulnerability rankings person shown. According to the data, Ghana is present placed second, conscionable down the Central American authorities and the archetypal state to marque bitcoin ineligible tender, El Salvador.

As shown by information from Visual Capitalist — an online steadfast focused connected exertion and the planetary economy, among others — Ghana’s five-year recognition default swap dispersed (CDSS) of 2,071 ground points (bps) is 1 of the highest globally. Only 4 countries person a recognition default swap dispersed that is higher than that of Ghana: Ukraine (10,856 bps), Argentina (4,470 bps), El Salvador (3,376 bps), and Ethiopia (3,035 bps).

As explained by Investopedia, CDS is “a fiscal derivative that allows an capitalist to swap oregon offset their recognition hazard with that of different investor.”

Interest Expense Ratio

Another metric pointing to Ghana’s apt default is the country’s involvement disbursal arsenic a percent of the gross home merchandise (GDP). According to Visual Capitalist data, with a stock of 7.2%, Ghana’s involvement disbursal ratio is the second-highest successful the satellite down lone that of Egypt (8.2%).

When these metrics are combined with the country’s indebtedness arsenic a percent of the GDP of 84.6%, and a authorities enslaved output of 17.1%, Ghana, which finally agreed to question the International Monetary Fund (IMF)’s help, looks destined to travel successful the footsteps of Sri Lanka, which defaulted connected its obligations successful May.

Meanwhile, according to the Visual Capitalist rankings, Tunisia is the African state with the adjacent highest default hazard successful 2022 and is followed by Egypt. Globally, Tunisia is ranked 3rd portion Egypt and Kenya are ranked 5th and sixth, respectively. Completing the apical 10 countries with the highest default is Namibia.

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