BoG Warns of Short-Term Debt Payment Risks
The Bank of Ghana (BoG) has cautioned that the completion of the country’s remaining external debt restructuring negotiations could create short-term external payment pressures, underscoring the need for stronger foreign reserve accumulation and increased domestic savings to meet future debt service obligations.
The warning is contained in the central bank’s May 2026 Monetary Policy Report (MPR), which noted that while Ghana has made significant progress in restructuring its external debt, the final stages of the process could pose temporary challenges for the country’s external payment position.
According to the report, these developments may have implications for the stability of the domestic currency, making it necessary to mobilise more domestic savings to support the settlement of future external debt obligations.
The Bank of Ghana stressed that maintaining a high level of international reserves remains critical to enabling the country to meet its external debt service commitments while safeguarding macroeconomic stability.
It further warned that government fiscal performance continues to face downside risks from global uncertainties, particularly fluctuations in commodity prices and persistent geopolitical tensions, which could affect export earnings, foreign exchange inflows and overall fiscal outcomes.
Despite these concerns, the central bank observed that the government’s fiscal targets for the review period were achieved, although revenue mobilisation and the pace of expenditure execution remain areas requiring close attention.
According to the report, revenue collection began showing signs of improvement in April 2026 following the steady implementation of new revenue measures introduced in the 2026 Budget.
The BoG attributed the improvement partly to the increased application of technology and artificial intelligence (AI) in revenue administration to plug leakages, improve compliance and enhance the efficiency of tax collection.
The report also indicated that government expenditure management is expected to improve further through the expanded implementation of the commitment authorisation system and the commencement of value-for-money assessment activities aimed at ensuring prudent use of public resources.
On fiscal performance, the report disclosed that government budgetary operations for the first quarter of 2026 recorded an overall budget surplus, on a commitment basis, of GH¢1.709 billion, representing 0.1 per cent of Gross Domestic Product (GDP).
This outturn was significantly better than the projected budget deficit of GH¢18.578 billion, equivalent to 1.2 per cent of GDP, for the same period.
The corresponding primary balance on a commitment basis recorded a surplus of 1.2 per cent of GDP, exceeding the programme target of 0.2 per cent of GDP.
On a cash basis, government also recorded an overall budget surplus of GH¢824.3 million, compared with a projected deficit of GH¢20.924 billion.
The cash surplus represented 0.1 per cent of GDP, against the targeted deficit of 1.3 per cent of GDP, reflecting stronger-than-expected fiscal performance during the first quarter of the year.
The Bank of Ghana said sustaining fiscal discipline, strengthening domestic revenue mobilisation, building external reserves and successfully concluding the remaining debt restructuring negotiations will be essential to preserving macroeconomic stability and supporting Ghana’s medium-term economic recovery.
