The stock of Ghana’s public debt in dollar terms rose sharply in 2025, increasing by $11.9 billion over the year, according to data released by the Bank of Ghana (BoG).
Dollar-denominated debt climbed from $49.4 billion in December 2024 to $61.3 billion by the end of December 2025, reflecting significant fiscal expansion and continued borrowing.
Despite the sharp increase in dollar terms, the picture looks different when expressed in the local currency.
Thanks to a substantial appreciation of the Ghana cedi, public debt in cedi terms fell from GH¢726.7 billion in December 2024 to GH¢641 billion at the close of 2025.
Analysts attribute this decline largely to the government’s intervention in the foreign exchange market, injecting over $11 billion to strengthen the cedi, which appreciated from GH¢14.70 to $1 in December 2024 to GH¢10.45 at the end of 2025.
With Ghana’s economy valued at approximately $111 billion, the debt-to-GDP ratio in dollar terms now stands at around 55%, highlighting the dual impact of rising borrowing and currency strength on overall fiscal metrics.
Implications for the economy
The increase in dollar-denominated debt has several implications for Ghana’s economy.
First, servicing external debt could become more expensive if the cedi were to weaken, as interest and principal payments on foreign obligations are tied to the US dollar.
This creates potential pressure on the government’s foreign reserves and could limit fiscal space for other development priorities.
At the same time, the appreciation of the cedi has provided temporary relief.
By reducing the local currency value of foreign-denominated obligations, debt servicing costs in cedis have decreased, helping to ease pressures on the domestic budget.
This also contributes to lower inflationary pressures by stabilising the exchange rate, which benefits both households and businesses relying on imported goods and services.
Debt management and fiscal strategy
Government efforts to manage debt through forex interventions reflect an active approach to stabilising the economy.
Analysts note that the $11 billion injection into the foreign exchange market not only bolstered the cedi but also helped maintain investor confidence and improve liquidity in the market.
However, sustaining this approach presents challenges.
Relying on currency appreciation to manage debt levels exposes Ghana to external shocks, including fluctuations in commodity prices and global financial conditions.
A weaker cedi in future could quickly reverse the cedi-denominated debt gains, increasing the fiscal burden.
The rise in public debt also underscores the importance of continued fiscal discipline and revenue mobilisation.
Ghana will need to balance borrowing for development with measures to maintain debt sustainability, including strengthening domestic revenue collection and improving the efficiency of public spending.
Outlook
While the cedi’s strength has provided some relief, the sharp increase in dollar-denominated debt signals that Ghana must remain vigilant in its debt management strategy.
For businesses, the stabilised cedi reduces input costs and import price volatility, but the broader implications of rising debt could affect fiscal policy, borrowing costs, and public investment priorities in the medium term.
As the country navigates a complex mix of external borrowing, domestic fiscal needs, and currency fluctuations, policymakers face the challenge of ensuring that the debt trajectory remains sustainable while supporting economic growth and development.
