Domestic Debt Rises to GH¢333bn in December 2025
By Praisebell Rosemond Larbi
Ghana’s domestic debt increased by GH¢24 billion to GH¢333.8 billion at the end of December 2025, reflecting government’s continued reliance on the local debt market to meet short-term financing needs, even as the country’s overall debt profile showed significant improvement.
According to the March 2026 Monetary Policy Report released by the Bank of Ghana, domestic debt rose from GH¢309.8 billion, driven largely by increased issuance of short-term instruments. This strategy, analysts say, is aimed at building liquidity buffers to enable government meet its financial obligations while managing cash flow pressures.
Despite the nominal increase, the domestic debt-to-Gross Domestic Product (GDP) ratio declined, indicating that the pace of economic expansion and improved fiscal management helped moderate the overall burden of domestic borrowing on the economy.
In contrast, Ghana’s external debt dynamics showed a mixed trend. While external debt increased in foreign currency terms due to fresh loan disbursements, it recorded a sharp decline when measured in local currency. The external debt stock fell from GH¢416.8 billion in December 2024 to GH¢307.2 billion in December 2025.
This significant reduction was largely attributed to the strong appreciation of the Ghana cedi, as well as principal repayments on Eurobonds and multilateral loans. In total, the local currency value of external debt dropped by GH¢125.2 billion, representing about 9 percent of GDP.
The combined effect of these developments led to a notable improvement in Ghana’s overall public debt position. Total public debt, including central government and guaranteed obligations, declined to GH¢640.99 billion, equivalent to 45.3 percent of GDP at end-December 2025. This marks a substantial drop from GH¢726.7 billion, or 61.8 percent of GDP, recorded in the same period in 2024.
A breakdown of the debt stock shows that external debt accounted for GH¢307.2 billion (21.7% of GDP), while domestic debt made up GH¢333.8 billion (23.6% of GDP), suggesting a relatively balanced distribution between domestic and external obligations.
The Bank of Ghana attributed the improvement in debt sustainability indicators to a combination of prudent fiscal policies, reduced borrowing costs, and increased amortisation of existing debt.
Additionally, the achievement of a stronger primary surplus has played a key role in stabilising the debt trajectory, reinforcing confidence in Ghana’s ongoing fiscal consolidation programme.
While the rise in domestic debt highlights continued financing pressures, the broader decline in the debt-to-GDP ratio signals progress in restoring macroeconomic stability, positioning the country on a more sustainable fiscal path as economic recovery gains traction.
