According to the Monetary Policy Report of the Bank of Ghana, the decline was mainly driven by cedi appreciation reducing the external debt in local currency by GH¢100.8 billion (8% of estimated GDP).

However, domestic debt increased slightly from GH¢309.8 billion to GH¢314.5 billion. The rise reflected controlled domestic financing aligned with the 2025 budget.

The combined effects of exchange rate appreciation and slower debt accumulation reduced the stock of total public debt at the end of November 2025. The stock of public debt decreased from 61.8% (revised GDP) in December 2024 to 45.5% in November 2025.

Similarly, the rate of debt accumulation shifted from 19.1% in 2024 to negative 11.3% by November 2025.

The provisional debt stock of central government and guaranteed debt stood at GH¢630.2 billion (45.0% of GDP) at end-October 2025, down from GH¢726.7 billion (61.8% of GDP) at end-December 2024.

Out of the total public debt, external debt was GH¢319.2 billion (22.8% of GDP) and domestic debt totalled GH¢311.0 billion (22.2% of GDP). The sharp decline reflected in the external debt.

The decline in the public debt was largely due to the appreciation of the currency, effective debt management, reduced borrowing cost and fiscal discipline, reflecting in the posting of a significant primary surplus.

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According to its July-August 2024 Economic Outlook, it said the domestic component of the debt has increased by as much as GH¢32.7 billion or 12.7%, from GH¢257.3 billion to GH¢290.0 billion in the year to June 2024, whereas the external component has increased only marginally by US$0.9 billion or 0.3% from US$30.1 billion to US$31.0 billion.

The IEA pointed out that since the government currently lacks access to the international bond market, it is understandable that it is only borrowing from the domestic market.

Nonetheless, it advised that the borrowing is closely monitored and controlled, so that it does not get out of hand and land the country into another major debt crisis.

As of end of June 2024, Ghana’s public debt stood at GH¢742.0 billion. This represents a year-to-date increase of GH¢133.6 billion or 22.0%.

The debt in dollar terms was US$50.9 billion, lower than US$52.2 billion at the end of December 2023, as a result of the effect of the sharp increase in the cedi/dollar rate on the domestic component.

In Gross Domestic Product terms, the debt was 70.6% at the end of June 2024 compared to 72.3 % at the end of December 2023. This is due to the much higher nominal GDP in 2024 compared to 2023.

In the Economic Credit Facility programme, the public debt is projected at 82.5% of GDP for 2024 [IMF Executive Board’s Second Review of Ghana’s ECF, June 28, 2024].

IEA said the projected figure is surprisingly high since the envisaged debt restructuring and fiscal consolidation under the ECF are supposed to place the debt on a declining path, reaching what is regarded as a sustainable level of about 56% by 2028.

“It is not clear whether this sustainable target is still attainable”, it concluded.

Source: Joy Business

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