As the era of cheap money draws to an end, bondholders are no longer prepared to cut Ghana any slack.

The West African nation’s dollar bonds have slumped 10% in 10 days, moving deeper into distressed territory as investors judge that re-financing debt in the Eurobond market won’t be an option when the Federal Reserve hikes rates and budget targets remain elusive, Bloomberg reports.

The extra premium demanded on Ghana's sovereign dollar debt jumped on Tuesday to an average 1,145 basis points, from 683 basis points in September.

Its $27 billion of foreign debt had the worst start to the year among emerging markets, extending last year's 14% loss, according to a Bloomberg index.

Meanwhile, the World Bank, in its January 2022 Global Prospects report, said: “Many Sub-Saharan African countries saw a marked deterioration in fiscal balances because of deployed relief measures, depleting already-narrow fiscal space (Ghana, Mozambique, Rwanda)”.

“This, together with constraints on financing and pressures to improve debt sustainability, will lead to a much less supportive fiscal stance across the region over the forecast horizon”.

The Bretton Woods institution added: “Fiscal adjustments are expected to predominantly happen on the expenditure side with a bigger reduction in fiscal deficits in resource-rich countries, partly reflecting revenue boosts from higher commodity prices and consolidation efforts in some countries”.

Ghana’s public debt stock, as of September 2021, was GHS341.8 billion, according to the November 2021 Bank of Ghana Summary of Economic and Financial Data has revealed.

This was equivalent to 77.8% of Gross Domestic Product (GDP).

Between July and September 2021, GHS5.9 billion fresh loans were added to the total debt.

According to the data from the Bank of Ghana, the domestic debt went up to GHS178.1 billion in September 2021 from GHS173.9 billion recorded in July 2021.

This was equivalent to 40.5% of GDP.

The financial sector resolution bond stayed the same at GHS14.9 billion in September 2021.

This was equivalent to 3.4% of GDP.

The external debt fell by $100 million in August to $27.9 billion in September 2021, equivalent to 37.2% of GDP.