Ghana’s Public Debt Drops to GH¢641bn in 2025

By Praisebell Rosemond Larbi

Ghana’s total public debt stock declined to GH¢641 billion at the end of 2025, reflecting an improvement in the country’s fiscal and debt sustainability indicators.

According to the latest Summary of Economic and Financial Data released by the Bank of Ghana in March 2026, the reduction represents a marginal drop from the GH¢726.7 billion recorded in 2024.

The data further showed a significant improvement in Ghana’s debt-to-GDP ratio, which fell sharply to 45.3% in 2025, compared to 61.8% in the previous year. This marks a notable easing in the country’s debt burden relative to the size of the economy.

Steady Decline in Debt Levels

The report indicated that Ghana’s debt stock declined steadily towards the end of 2025, particularly between November and December, suggesting improved fiscal management and favourable macroeconomic conditions.

Market analysts have partly attributed the decline to the strong performance of the Ghanaian cedi during the year, especially in the final quarter where appreciation of the local currency helped reduce the domestic value of external debt.

This exchange rate effect, combined with ongoing fiscal consolidation efforts, appears to have contributed to the overall decline in the debt stock.

External and Domestic Debt Dynamics

A breakdown of the figures shows that Ghana’s external debt stood at US$29.4 billion as of end-2025.

Domestic debt, however, edged up slightly to GH¢333.8 billion, indicating a continued reliance on the local debt market to finance government operations.

The increase in domestic debt compared to December 2024 suggests that while external obligations may have moderated in cedi terms, borrowing within the domestic market remains an important component of government financing strategy.

Stronger Economic Base Supports Ratio Improvement

The improvement in Ghana’s debt metrics has also been supported by a significant expansion in the size of the economy.

Data from the Ghana Statistical Service shows that Ghana’s nominal GDP is now estimated at GH¢1.4 trillion, up from GH¢1.1 trillion in 2024.

This growth in the economic base has played a key role in reducing the debt-to-GDP ratio, even as nominal debt levels remain elevated.

Implications for Credit Outlook

Analysts suggest that the decline in Ghana’s debt stock and the improved debt-to-GDP ratio could have positive implications for the country’s creditworthiness.

A lower debt burden, combined with a stronger currency and expanding economic output, may support Ghana’s case in upcoming credit rating reviews by international agencies.

This could, in turn, improve investor confidence and potentially reduce borrowing costs over time.

Outlook

While the latest figures signal progress, economists caution that sustaining the gains will require continued fiscal discipline, prudent debt management, and sustained economic growth.

Maintaining exchange rate stability, strengthening domestic revenue mobilisation, and carefully managing borrowing, particularly in the domestic market will be critical to ensuring long-term debt sustainability.

For now, the decline in Ghana’s debt stock offers a positive signal of improving macroeconomic stability, even as policymakers remain cautious about emerging fiscal risks.