Deloitte Ghana has urged the government to exercise caution in its plans to return to the international capital markets, despite the country’s remarkable strides in reducing public debt and improving macroeconomic stability.

The professional services firm’s latest assessment of the 2025 Mid-Year Review Budget warns against repeating past mistakes that have previously plunged the nation into a debt crisis.

Ghana’s public debt profile has seen a dramatic improvement in the first half of 2025. Data from the Ministry of Finance reveals that as of June 2025, the country’s total public debt had fallen by GH¢113.7 billion, representing a 15.6% drop from GH¢726.7 billion in December 2024 to GH¢613 billion. This reduction was largely attributed to the appreciation of the Ghana cedi and the successful conclusion of the government’s debt restructuring programme.

This fiscal turnaround has also translated into a sharp decline in the debt-to-GDP ratio, which dropped from 70.6% in June 2024 to 43.8% in June 2025. Compared to the 78.5% debt-to-GDP ratio recorded in December 2021, this marks a significant improvement in debt sustainability and places the country on track to achieve the medium-term target of 55% by 2028, in line with its agreement with the International Monetary Fund (IMF).

Rating Agencies Likely to Respond

The improvement in debt sustainability is expected to capture the attention of global credit rating agencies such as Standard & Poor’s and Moody’s. Deloitte notes that these upgrades will likely boost investor confidence and improve Ghana’s attractiveness on the global financial stage.

However, the firm emphasises that this should not be a signal for the government to rush into external borrowing without a well-structured repayment and investment plan. “Reliance on foreign debts must be moderated, with inflows strictly channelled into strategic capital investments that can adequately support repayment of such loans,” Deloitte cautioned.

Deloitte’s warning stems from Ghana’s recent history of debt distress. Over the past three years, the nation faced severe fiscal challenges, culminating in a debt restructuring programme and a temporary exclusion from the capital markets. The firm warns that an unguarded return to heavy borrowing could reverse these hard-won gains. “The government must take recycling lessons from historical mistakes to avoid a repeat of the debt hangover experienced over the last three years,” the report stated.

The firm further advised that any re-engagement with capital markets should be driven by a disciplined approach that prioritises capital investments capable of generating revenue for debt servicing.

Building Financial Buffers

One of the positive developments noted in the 2025 Mid-Year Review is the government’s plan to establish cash buffers in a sinking fund dedicated to loan repayments. Deloitte believes this is a crucial step towards ensuring timely repayment of debt obligations and preventing the accumulation of arrears. “We recommend that the government accelerate efforts in this regard and provide regular updates on the fund’s position in order to enhance investor confidence,” Deloitte advised.

Such transparency, the firm argues, will be key in assuring both domestic and international investors that Ghana is committed to sustainable debt management.

While the temptation to tap into international capital markets may grow as investor sentiment improves, Deloitte insists that a careful balance must be struck between funding development projects and maintaining fiscal discipline. The firm points out that foreign borrowing should be targeted towards projects that have clear economic returns, such as infrastructure, energy, and industrial development initiatives that can boost export earnings and productivity.

Ghana’s ongoing economic recovery, bolstered by a stable currency, lower debt ratios, and improved investor perceptions, presents a unique opportunity to consolidate gains. However, as Deloitte highlights, sustainable growth will require the government to avoid overexposure to external debt and to strengthen domestic revenue mobilisation.

The path to full economic stability is still fragile. Although the debt-to-GDP ratio has significantly improved, Ghana remains vulnerable to external shocks, exchange rate volatility, and global interest rate fluctuations.