Ghana’s improved debt outlook is set to face a more demanding international assessment framework after the International Monetary Fund and World Bank approved major changes to the system used to judge debt sustainability in low-income countries.
The reforms will give greater attention to domestic debt, long-term pressures, forecast realism and public debt data, all of which matter for Ghana as large domestic bond maturities approach in 2027 and 2028.
The changes do not alter Ghana’s current debt rating immediately. In July, the IMF upgraded Ghana from high to moderate risk of debt distress after restructuring and stabilisation pushed key debt indicators below their thresholds. But the improvement remains conditional.
Ghana still faces heavy refinancing needs, commodity-price exposure and contingent liabilities in sectors such as energy, cocoa and gold. That distinction matters as the government prepares to use some restored fiscal space for investment and job creation.
The 2027 Budget is expected to shift further from stabilisation towards growth, including a plan to make about US$2 billion available annually to job-creating sectors. The question is therefore not simply whether Ghana has room to spend more, but how that room will be measured and what risks future financing could create.
Domestic Debt Moves Closer to the Centre of Analysis
The revised IMF-World Bank debt sustainability framework is expected to become operational in the second half of 2027. One of its central changes is a more systematic assessment of domestic debt vulnerabilities, alongside new tools for judging long-term development and climate-related pressures.
The IMF says the revised system will help countries “better assess how much fiscal space might be available” while containing debt vulnerabilities over time.
That is particularly relevant for Ghana. Domestic public debt reached GH¢391.1 billion in June, equivalent to more than half of total public debt. The rising domestic-debt burden can affect refinancing costs, bank balance sheets and the financing available to private businesses.
The new framework does not automatically make domestic borrowing undesirable. A deeper local bond market can reduce foreign currency risk and provide government with more stable financing. The concern is whether maturities, interest costs and investor concentration create pressures that become difficult to manage.
2027 and 2028 Remain the Immediate Refinancing Test
Ghana’s current IMF debt analysis already identifies the next two years as a difficult part of the repayment profile. Domestic bond maturities created under the Domestic Debt Exchange Programme are concentrated in 2027 and 2028, while Treasury bills remain an important source of financing.
The IMF projects Ghana’s gross financing needs to peak above 16 per cent of GDP in 2028. That signals substantial pressure to refinance maturing obligations while still financing the budget.
Government has responded by rebuilding the domestic bond market, establishing sinking funds and preparing buybacks and other liability-management operations. These measures can smooth payments across time, but they do not remove the underlying debt service.
The financial-sector connection also matters. Banks and non-bank institutions already hold substantial government securities. If public borrowing rises too quickly, the domestic market’s capacity to absorb new issuance could tighten, raising borrowing costs or reducing funds available to businesses.
Moderate Risk Still Comes With Conditions
Ghana’s return to moderate risk is a significant improvement, but it does not mean borrowing constraints have disappeared. The IMF’s stress tests show that debt dynamics remain sensitive to export prices, exchange-rate movements and contingent liabilities.
Gold and cocoa are especially important because they account for a large share of Ghana’s merchandise exports. A sharp fall in commodity prices could weaken foreign exchange earnings, government revenue and the cedi at the same time, making foreign currency debt more expensive to service.
The IMF has described recent improvements in Ghana’s debt trajectory as creating “carefully calibrated fiscal space”. It also says the primary-surplus target could fall from 1.5 per cent of GDP to 0.5 per cent from 2027 while remaining consistent with the 45 per cent debt-to-GDP anchor for 2034.
That room depends on stronger revenue mobilisation, better public investment management and tighter oversight of state-owned enterprises.
Fiscal Space Will Be Judged by What It Finances
The revised framework is not designed simply to make borrowing more difficult. Its purpose is to improve how countries distinguish sustainable development financing from debt accumulation that raises future stress.
For Ghana, that distinction will become increasingly important as investment ambitions expand. The recent US$2 billion jobs-financing plan could involve public spending, guarantees, development finance and private capital, with the exact mix expected in the 2027 Budget.
If new borrowing supports infrastructure and productive investment that raises future growth, exports and revenue, it can strengthen the economy’s capacity to service debt. If financing instead creates weak returns or hidden contingent liabilities, the same fiscal space can disappear quickly.
Ghana’s debt restructuring has created breathing room and restored a measure of market confidence. The new IMF-World Bank framework will increasingly test whether that breathing room is being used to strengthen the country’s capacity to carry debt, rather than simply to accumulate more of it.
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