Ghana is moving to build a dedicated domestic-debt buffer ahead of a heavy repayment schedule in 2027 and 2028, with the 2027 Fiscal Strategy Document, now publicly available through the Ministry of Finance, setting out a pre-funding plan built around tax revenue, sinking-fund accumulation and longer-dated domestic bonds.
Government intends to transfer 7 percent of gross domestic non-oil tax revenue each month into the Sinking Fund Cedi Account, creating liquidity before large restructured bonds fall due.
The plan is substantial. Government estimates that the tax-revenue transfer will provide about GH¢20 billion to the sinking fund in 2027, alongside GH¢19 billion from domestic bond issuance.
The official 2026-2029 Medium-Term Debt Management Strategy places principal maturities at about GH¢39.6 billion in 2027 and GH¢39.0 billion in 2028, with interest obligations of GH¢18.8 billion and GH¢14.0 billion respectively. That implies roughly GH¢111.4 billion in principal and interest obligations across the two years.
The timing matters because Ghana is entering this refinancing period with debt indicators improved from crisis levels but still requiring careful management. The latest debt data from the Bank of Ghana put total public debt at GH¢733.9 billion in July, equivalent to 45.9 percent of GDP, with domestic debt at GH¢396.7 billion.
The IMF projects gross financing needs to peak at 16.3 percent of GDP in 2028 and identifies the concentration of DDEP maturities in 2027 and 2028 as a significant liquidity risk.
Sinking Fund Moves Centre Stage
Building cash before bonds mature can reduce the need for the government to scramble for financing when repayments fall due. A stronger sinking fund can smooth redemptions, reduce rollover pressure and give debt managers more flexibility to conduct buybacks, switches and other liability-management operations.
That matters when investor demand is uncertain. Heavy refinancing concentrated within a short period can push government towards shorter instruments or higher yields if the market cannot absorb new issuance. Pre-funding part of the obligation therefore provides protection against unfavourable market conditions.
The approach is not costless. Revenue transferred into the sinking fund cannot simultaneously finance other expenditure, while issuing new bonds to build buffers can temporarily increase gross borrowing before old obligations are retired. The issue is whether government can build the buffer without weakening development spending or adding unnecessary interest costs.
Domestic Market Carries More Weight
The fiscal strategy makes the domestic market central to that balance. Government says it does not plan to issue Eurobonds in 2027 or over the medium term. Instead, domestic financing from banks and non-bank investors will serve as the residual source of budget financing, while medium- and long-term bonds will be used to reduce refinancing risk.
That reduces immediate exposure to foreign-currency borrowing, but it also means banks, pension funds and asset managers will carry more of the financing burden. This is why the domestic debt burden matters beyond government accounting. If sovereign issuance grows faster than the market’s capacity to absorb it, yields could rise or financial institutions could become less willing to expand credit to businesses.
Current evidence does not establish that private borrowers are already being crowded out. Credit conditions have improved and lending has been recovering. The risk is forward-looking: government must deepen the bond market without allowing its own financing requirement to dominate domestic liquidity.
Fiscal Space Meets Refinancing Pressure
The strategy also creates room for higher productive investment. Government plans to reduce the commitment-basis primary surplus target from 1.5 percent of GDP in 2026 to 0.5 percent from 2027, creating fiscal space equivalent to 1 percent of GDP. A further 0.5 percent of GDP is expected from revenue measures, with the combined space earmarked for the New Economy programme.
This shift will also sit inside Ghana’s first IMF assessment under the non-financing Policy Coordination Instrument. Government is targeting real GDP growth of at least 5 percent and still intends to bring public debt to 45 percent of GDP or below by 2034, while maintaining a positive primary balance.
Those objectives can coexist only if debt management and growth policy reinforce each other. Borrowing that extends maturities and finances productive investment can strengthen future debt-service capacity. Borrowing that merely rolls obligations forward at high cost would do the opposite.
Execution Will Determine the Buffer
Ghana’s next fiscal phase is therefore less about whether debt ratios have improved and more about whether the maturity structure can be managed without squeezing growth. The sinking-fund plan is an attempt to move repayment pressure away from the maturity date and into a controlled pre-funding programme.
The 2027 Budget will show how much of the planned buffer has actually been accumulated, how quickly longer-term issuance can replace short-term financing and whether revenue performance can support both debt service and new investment. Ghana has created more policy room than during the debt crisis, but the 2027–2028 repayment concentration means that room will have to be managed carefully.
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