Ghana has made a major stride in managing its public finances, cutting down its total public debt by an impressive GH¢139 billion in just six months. But beneath the headline improvement, economists are raising red flags about the country’s continued vulnerability to external shocks.
Latest figures from the Bank of Ghana reveal that the total public debt stock fell from GH¢752.1 billion at the start of 2025 to GH¢613.0 billion by end-June. Although there was a slight increase from the GH¢612.1 billion recorded in May, the overall decline marks a significant shift in Ghana’s debt trajectory.
This turnaround is credited to currency stability, GDP growth, and a slowdown in domestic borrowing, all of which helped ease the pressure on government financing needs. However, the composition of the debt suggests the underlying risks are far from over.
External debt remains the lion’s share of Ghana’s liabilities, hitting GH¢300.3 billion or 21.4% of GDP in June, a slight increase from GH¢296.2 billion the previous month. In dollar terms, external debt climbed to US$29.1 billion, highlighting Ghana’s continued exposure to foreign exchange fluctuations and global interest rate volatility.
On the domestic front, debt levels fell modestly to GH¢312.7 billion, down from GH¢315.6 billion in May, suggesting some degree of fiscal consolidation and a possible scale-back in local bond issuance. Still, domestic debt now represents 22.3% of GDP.
The overall public debt-to-GDP ratio stood at 43.8% as of June—a sharp drop from 66.8% a year ago. While part of the improvement is attributed to GDP rebasing, it also reflects the effects of tighter fiscal controls and macroeconomic reforms.
Despite the improved optics, economists and market analysts are urging caution. Ghana’s debt structure, heavily tilted towards external sources, means any sudden depreciation of the cedi or rise in global interest rates could wipe out the gains.
“The numbers look encouraging on the surface,” said one Accra-based economist, “but the fragility of our external position means we are still walking a tightrope.”
Experts argue that for Ghana to safeguard these gains, the government must prioritise debt sustainability through a combination of fiscal discipline, efficient reserve management, and greater access to concessional lending.
As investors take note of the improving debt metrics, the challenge for Ghana will be turning this short-term relief into a lasting foundation for economic stability.
