Ghana’s debt crisis has come under fresh scrutiny following revelations that the country borrowed a staggering US$15.59 billion from international capital markets between 2007 and 2021, with much of the money used to finance government budgets rather than self-repaying projects.
The disclosure by former First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, has reignited questions about how years of borrowing, fiscal pressures and structural weaknesses combined to push Ghana into one of its most severe debt crises.
In an article titled “How not to Miss a Crisis: Lessons from Ghana,” Dr. Opoku-Afari argued that Ghana’s Eurobond borrowing strategy created vulnerabilities that became increasingly difficult to manage when major economic shocks hit.
$15.59bn Raised Through Nine Eurobond Issuances
According to Dr. Opoku-Afari, Ghana borrowed US$15.59 billion from international capital markets between 2007 and 2021 through nine Eurobond issuances.
The funds, he explained, were primarily raised to close annual budget financing gaps. Rather than being directed specifically toward projects capable of generating enough revenue to repay the debt, significant portions were spent on recurrent expenditure.
This distinction has become central to the debate over Ghana’s debt accumulation.
Borrowing to finance productive infrastructure can potentially create future economic returns and government revenues. However, using external commercial borrowing for recurrent expenditure can create a difficult cycle in which new loans are required to meet existing spending obligations.
For Ghana, the pressure intensified as fiscal deficits continued to accumulate.
Debt Exploded From 63% to 93% of GDP
Dr. Opoku-Afari highlighted the dramatic deterioration in Ghana’s public debt position in just a few years.
Public debt stood at approximately 63% of Gross Domestic Product in 2019. By the end of 2022, around the time the IMF-supported programme was approved, the debt ratio had climbed to about 93% of GDP.
The rapid increase exposed the vulnerability of Ghana’s fiscal position to external and domestic shocks.
The COVID-19 pandemic placed enormous pressure on public finances, while the Russia-Ukraine war triggered additional disruptions to global commodity and financial markets. Sharp episodes of currency depreciation further increased the cedi value of Ghana’s foreign-currency obligations.
The situation became even more dangerous when Ghana lost access to international capital markets in 2022.
Ghana Eventually Defaulted on External Debt
The accumulation of pressures ultimately forced Ghana into a historic debt crisis.
In December 2022, the government announced a suspension of debt service payments on Eurobonds, several bilateral loans and commercial term loans.
The move effectively placed Ghana in default on a substantial portion of its external public debt and paved the way for a comprehensive debt restructuring process.
The crisis also demonstrated how quickly fiscal vulnerabilities can become a full-blown sovereign debt emergency when a country can no longer borrow easily to refinance existing obligations.
Ghana subsequently embarked on a debt restructuring programme as part of efforts to restore debt sustainability and regain access to international financial markets.
IMF Programme Failed to Fix Deeper Problems
Dr. Opoku-Afari also questioned the effectiveness of the IMF-supported programme implemented between 2015 and 2019.
Although the programme helped narrow trade and budget deficits and supported important reforms, he argued that it did not fundamentally resolve Ghana’s underlying fiscal and structural constraints.
This raises a crucial question about the sustainability of fiscal improvements that depend heavily on short-term consolidation without sufficiently addressing deeper institutional weaknesses.
Between 2010 and 2019, Ghana was widely viewed as one of Africa’s stronger economic performers. The country recorded sustained, although volatile, economic growth and successfully completed an IMF-supported programme.
It also strengthened its public financial management framework, introduced fiscal rules and improved debt management institutions.
Despite these achievements, the country eventually found itself facing a severe sovereign debt crisis.
Was Ghana’s Growth Hiding Deeper Problems?
The sharp reversal has prompted broader questions about the quality of Ghana’s economic growth during the period.
Dr. Opoku-Afari questioned whether the strong growth recorded between 2010 and 2019 masked vulnerabilities that were not sufficiently reflected in headline economic indicators.
He also raised concerns about hidden debt and contingent liabilities in sectors including energy, cocoa and financial services.
These obligations could increase the government’s financial burden when state-owned entities or sector-specific programmes encounter serious difficulties.
The concerns challenge the assumption that strong economic growth automatically translates into fiscal resilience.
A country can record impressive GDP growth while simultaneously accumulating risks that eventually threaten public finances.
‘Ghana Beyond Aid’ Faces Fresh Questions
The revelations have also reopened debate over the ambitious “Ghana Beyond Aid” vision.
Dr. Opoku-Afari questioned whether the vision was an unrealistic ambition that became detached from the country’s fiscal realities.
The concept sought to position Ghana on a path toward greater economic self-reliance and reduced dependence on external assistance.
Yet the eventual debt crisis demonstrated that Ghana remained highly exposed to external financing conditions, foreign exchange pressures and international investor sentiment.
The crisis therefore raises difficult questions about whether the country had truly built the fiscal and institutional foundations required to sustain that ambition.
Lessons From Ghana’s Debt Crisis
The experience offers a powerful warning about the dangers of relying heavily on borrowing to close recurring budget gaps.
Ghana’s US$15.59 billion Eurobond borrowing provided substantial financing over 14 years, but the subsequent debt crisis showed that the use of borrowed funds matters as much as the amount borrowed.
The challenge now is to ensure that future borrowing supports productive investment, strengthens revenue generation and does not create unsustainable repayment obligations.
For policymakers, investors and taxpayers, Ghana’s debt crisis remains a stark reminder that economic growth, fiscal rules and international surveillance cannot eliminate risk unless deeper structural weaknesses are addressed.
The US$15.59 billion borrowing story is therefore more than a record of past debt. It is a warning about what can happen when repeated budget financing pressures meet expensive external borrowing, economic shocks and weakened market access.
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