Ghana’s improving debt outlook may face renewed pressure as the International Monetary Fund (IMF) projects a reversal in the country’s debt trajectory over the next two years.
Despite notable gains following recent restructuring efforts, the Fund warns that underlying vulnerabilities remain, raising concerns among policymakers and market watchers.
According to the IMF’s latest Fiscal Monitor Report, Ghana’s debt-to-GDP ratio is expected to climb to 53.0 percent by the end of 2026. This represents a significant increase from the 45.3 percent recorded in 2025, when the country benefited from debt restructuring and fiscal consolidation measures.
The projected rise comes after a marked improvement from 2024, when Ghana’s debt-to-GDP ratio stood at 61.8 percent. Data from the Bank of Ghana shows that total public debt declined from GH¢726.7 billion in 2024 to GH¢641 billion in 2025, reflecting the impact of restructuring efforts and tighter fiscal controls.
While the IMF acknowledges these gains, it cautions that the recovery may not yet be firmly secured. The report does not provide a detailed breakdown of the factors driving the anticipated increase but notes that projections are based on a post-debt restructuring scenario, including assumptions about borrowing and interest rates.
Uncertainty Over Key Drivers
Analysts have pointed out that several factors could influence Ghana’s debt path in the coming years. Chief among them are borrowing patterns, exchange rate movements, and the pace of economic growth.
Some market observers argue that a resurgence in borrowing, particularly through domestic instruments, could place upward pressure on the debt ratio. In April 2026, the government raised approximately GH¢2.7 billion through a 7-year bond issuance, marking a return to long-term domestic borrowing after the Domestic Debt Exchange Programme. The bond carries a coupon rate of 12.5 percent and is set to mature in March 2033.
Currency depreciation also remains a key risk. A weaker cedi could inflate the local currency value of external debt, thereby worsening debt indicators. At the same time, slower-than-expected economic growth could reduce the denominator in the debt-to-GDP ratio, making the debt burden appear heavier.
Economic Growth Provides Some Cushion
There are, however, positive signals from the real sector. Data from the Ghana Statistical Service indicates that the size of the economy has expanded to an estimated GH¢1.4 trillion, up from GH¢1.1 trillion in 2024. This growth provides some buffer against rising debt levels, as a larger economy can better absorb liabilities.
The IMF also projects that Ghana’s debt-to-GDP ratio could ease slightly to 50.7 percent in 2027, suggesting that the anticipated increase in 2026 may be temporary if fiscal discipline is maintained.
The government has reiterated its commitment to maintaining debt sustainability through a range of policy measures. Finance Minister Dr. Ato Forson, in the 2026 Budget Statement, outlined a strategy focused on prudent borrowing and improved transparency.
He stated that the government intends to expand access to concessional financing, rebuild the Sinking Fund, and implement debt reprofiling and buyback programmes. These measures are aimed at reducing refinancing risks and managing debt more effectively over the medium term.
“Managing debt, not being managed by it,” he said, emphasizing the administration’s goal of restoring Ghana to a moderate risk of debt distress by 2028.
Ghana Still Classified as Debt Distressed
Despite recent progress, Ghana remains classified as a debt-distressed country by the IMF.
The classification reflects the country’s high debt burden and vulnerability to external shocks. However, the Fund has acknowledged improvements in Ghana’s fiscal position and expressed optimism that ongoing reforms could yield positive results.
If current policies are sustained, the IMF expects Ghana to transition to a moderate risk of debt distress by 2028. Achieving this target will depend on consistent fiscal discipline, effective debt management, and stable macroeconomic conditions.
Global Debt Pressures Add to Concerns
Ghana’s situation is unfolding against a backdrop of rising global debt levels. The IMF warns that public debt worldwide is projected to reach 100 percent of GDP by 2029, driven by increased spending needs and higher interest costs.
This global environment could complicate Ghana’s efforts to manage its debt, as tighter financial conditions and higher borrowing costs may limit access to affordable financing.
The Fund has called on countries to implement credible and well-sequenced fiscal adjustment measures to address growing vulnerabilities in the global financial system.
While the IMF’s projection signals potential challenges ahead, it does not negate the progress Ghana has made in stabilizing its economy. The country’s ability to sustain reforms, manage borrowing, and support economic growth will be critical in determining whether the projected rise in debt becomes a temporary setback or a longer-term concern.
The outlook remains cautiously optimistic, with both risks and opportunities shaping Ghana’s fiscal future.
READ ALSO: GSE Trading Slumps Sharply Despite Strong Index Gains
