Ghana’s Public Debt Falls by GH¢139 Billion in First Half of 2025, Bolstered by Fiscal Prudence and Cedi Stability

Ghana’s public debt stock has seen a remarkable decline of GH¢139 billion in the first half of 2025, dropping from GH¢752.1 billion in January to GH¢613.0 billion by June, according to the Bank of Ghana’s latest Summary of Financial and Economic Data.

This marks a significant improvement in the country’s fiscal position, driven by currency stabilization, nominal GDP growth, and restrained domestic borrowing, despite a slight increase from GH¢612.1 billion in May.

The debt-to-GDP ratio held steady at 43.8% in June, a substantial reduction from 66.8% in June 2024, attributed to GDP rebasing and macroeconomic stabilization efforts under the International Monetary Fund (IMF) programme. Finance Minister Dr. Cassiel Ato Forson, presenting the 2025 Mid-Year Budget Review on July 24, highlighted a negative 15.6% rate of debt accumulation, a historic first for Ghana, crediting prudent fiscal measures and debt restructuring.

External debt, which rose to GH¢300.3 billion (21.4% of GDP) or US$29.1 billion in June from GH¢296.2 billion (US$28.5 billion) in May, remains a concern due to its dominance in Ghana’s liabilities. The increase in dollar terms reflects the cedi’s vulnerability to fluctuations, with the currency trading at GH¢10.45 to the US dollar as of July 28, despite a 42% appreciation in 2025, per Bank of Ghana Governor Dr. Johnson Asiama. Domestic debt, however, saw a modest decline to GH¢312.7 billion (22.3% of GDP) from GH¢315.6 billion in May, signaling reduced reliance on local bond issuance.

Economists note that initiatives like the Gold-for-Oil and Gold-for-Reserves programmes have bolstered cedi stability, saving an estimated GH¢150 billion in potential debt increases, according to Elikem Kotoko, Deputy CEO of the Forestry Commission. However, structural risks persist, including exposure to exchange rate volatility and global financial tightening. The IMF projects Ghana’s debt-to-GDP ratio to further decline to 69.7% by 2029, but warns of challenges from high financing needs and energy sector losses.

The Minority in Parliament, while acknowledging the progress, has criticized the government’s handling of the foreign exchange market, citing dollar shortages impacting businesses. They advocate for enhanced domestic production and transparent FX policies to sustain gains. As Ghana navigates its IMF-supported recovery, fiscal discipline and access to concessional financing will be critical to maintaining debt sustainability and shielding the economy from external shocks.