In a note shared with clients, Barclays analysts Michael Kafe and Andreas Kolbe revealed that Ghana’s debt-to-GDP ratio likely fell to 54% in January 2025—down from 61.8% at the end of December 2024.
This marks a considerable achievement, arriving three years ahead of the International Monetary Fund’s (IMF) 2028 target under the country’s $3 billion support programme.
Debt ratio falls on back of lower borrowing and expanding economy
The analysts attribute the rapid decline to reduced government borrowing and a notable increase in the country’s gross domestic product. “Ghana’s public debt has eased earlier than expected, largely due to a bigger economy and fiscal restraint,” Kafe and Kolbe noted.
The Bank of Ghana is expected to release its official report with updated debt statistics within the next two weeks.
Following a default on external loans in 2022, Ghana turned to the IMF for assistance. Now, under the new leadership of President John Dramani Mahama—who secured a decisive victory in the December 2024 elections—the government has committed to restoring economic stability through prudent fiscal measures.
Mahama’s administration is targeting a sharp reduction in the budget deficit, aiming to bring it down to 3.1% of GDP in 2025, compared with 7.9% recorded in 2024.
Public debt inches up despite overall progress
Despite the positive trajectory, public debt did rise slightly in January, increasing by 3.9% month-on-month to 755 billion Ghanaian cedis (approximately $57.4 billion). This increase was mainly driven by about 10 billion cedis in domestic borrowing and a 4% depreciation of the Ghanaian cedi against the US dollar.
Nonetheless, the country’s nominal GDP is projected to grow significantly, reaching an estimated 1.4 trillion cedis in 2025, up from around 1.2 trillion cedis the previous year.
Debt may rise temporarily as development programmes roll out
Barclays warned that while the outlook is encouraging, debt levels could temporarily rise as the government begins to implement its planned programmes. “Although Ghana is making progress, public debt could increase again as the administration scales up expenditure for key initiatives,” the analysts observed.
Under the terms of its agreement with the IMF, Ghana is required to carry out a series of reforms designed to bring its debt-to-GDP ratio to 55% by 2028—a target it is now well on track to meet ahead of schedule.