Finance Minister Dr Cassiel Ato Forson has outlined Ghana’s Medium Term Debt Management Strategy for 2025 to 2028, focusing on concessional borrowing, risk reduction, and maintaining public debt below 70% of GDP to protect the economy from future financial shocks.
Presenting the 2026 budget to Parliament on Thursday, November 13, Dr Forson announced that Ghana’s total public debt fell from GH¢726.7 billion in 2024 to GH¢630.2 billion by October 2025, marking one of the largest annual reductions in national history. The decline reflected strict fiscal discipline, prudent borrowing, and a stronger Ghana cedi.
Ghana recorded a negative rate of debt growth of 13.3% in 2025, down from a positive 19.1% in 2024. The achievement demonstrates government’s commitment to reversing the debt accumulation trajectory that threatened macroeconomic stability and forced the country into an International Monetary Fund (IMF) Extended Credit Facility programme.
The 2026 deficit is projected at 2.8% of GDP, well within the IMF programme target and significantly lower than the 10.6% recorded in 2022 at the height of the debt crisis. Government targets a primary surplus of 1.5% of GDP in 2026, ensuring Ghana stays on track with fiscal consolidation objectives that end in May 2026.
Government has adopted a zero Bank of Ghana financing policy, eliminating direct central bank funding of budget deficits that previously contributed to inflationary pressures and weakened monetary policy effectiveness. The discipline ensures fiscal policy does not undermine monetary policy objectives of price stability and exchange rate management.
Domestic debt markets have recovered substantially. Treasury bill rates fell to 10.7% from 28.9%, the lowest in 14 years, while eurobond yields declined by 300 basis points, restoring investor confidence in Ghana’s creditworthiness. The improved market sentiment reflects successful debt restructuring and stronger economic fundamentals.
Government completed the exchange of US$13,103.9 million in outstanding Eurobonds in October 2024 with a participation rate of 98.6%. The restructuring resulted in a 37% nominal reduction equivalent to US$4,866.0 million in upfront reductions including Bondholder Post Default Interest claims as of end December 2023, excluding the Long Term Par Note option.
Debt service relief of approximately US$4,325.0 million during the IMF Extended Credit Facility programme period significantly eases fiscal pressures. The average coupon rate on Eurobonds dropped from 8% to lower levels, reducing annual interest obligations and freeing resources for development spending on infrastructure, education, and healthcare.
The debt management strategy prioritizes concessional borrowing from multilateral institutions to refinance high cost debt and reduce interest burdens. Government will engage primarily with the World Bank, African Development Bank, and other development finance institutions offering below market interest rates and longer repayment periods.
External loan disbursements in 2024 amounted to US$1,046.8 million, nearly 70.4% higher than the previous year. The increase came mainly from receipts of US$300.0 million World Bank Development Policy Operation and US$1,320.0 million from the IMF Extended Credit Facility. IMF disbursements accounted for 52.1% of total external borrowing in 2024.
Government conducted an audit of outstanding arrears and payables totalling GH¢68.8 billion, covering unpaid invoices and interim payment certificates from contractors and suppliers. The exercise uncovered GH¢10.4 billion in fraudulent claims that would have been paid without careful verification, demonstrating importance of expenditure controls.
The audit confirmed GH¢47.8 billion in legitimate claims and flagged GH¢8.6 billion for further review due to incomplete documentation. The finance ministry has committed to clearing legitimate outstanding obligations to contractors and suppliers to restore confidence in government financial commitments while preventing payment of fraudulent claims.
Government revealed widespread abuse in Ghana’s import declaration system between April 2020 and August 2025. Over 525,000 transactions valued at US$83 billion were processed through import declaration forms, yet only 10,440 involved actual imports. About US$31 billion was transferred abroad without any goods entering the country.
Dr Forson warned that these practices drained reserves, weakened the cedi, and denied the state revenue needed for schools, roads, and hospitals. Individuals and institutions implicated in the transactions have been referred to the Attorney General, Economic and Organised Crime Office (EOCO), Financial Intelligence Centre (FIC), and Criminal Investigations Department (CID) for investigation.
The Bank of Ghana will now match every foreign exchange transfer to verified import data to prevent future losses. The comprehensive approach combines technology deployment with structural reforms to reduce opportunities for manipulation and protect national reserves from fraudulent schemes disguised as legitimate trade.
Ghana’s fiscal strategy will match discipline with compassion, protecting priority social spending in education, health, and social protection while maintaining tight expenditure controls. The government aims to ring fence investment and prioritize public goods spending on human development while addressing inefficiencies across ministries, departments and agencies.
Total expenditure for 2026 is projected at GH¢302.5 billion, representing 18.9% of GDP, with significant portions dedicated to capital projects under the Big Push Infrastructure Programme and energy sector reforms. Government will impose strict expenditure limits backed by strong cash management controls to prevent accumulation of new expenditure arrears.
The debt sustainability framework aims to bring public debt down to programmed levels by 2028, ensuring Ghana can service obligations without sacrificing development priorities. Government will develop a coherent policy on non concessional external borrowing and clarify expected amounts and intended uses of external funds.
Fitch Ratings estimates Ghana’s interest payment to revenue ratio at 29% in 2025 and 30% in 2026, among the highest for rated sovereigns. The Finance Committee disclosed that GH¢20 billion has been earmarked in the 2025 budget for interest payments, including obligations to Independent Power Producers and the Energy Sector Levy Account.
These projections underscore importance of effective debt management and fiscal strategies to ensure sustainable economic growth. Government will strengthen capacity of institutions like the Ghana Infrastructure Investment Fund (GIIF) and Public Investment Management Unit (PIMU) to ensure transparency and efficiency in deploying borrowed funds.
The Medium Term Debt Management Strategy aligns with IMF programme goals, particularly the aim of reducing fiscal deficit while supporting economic transformation. Government acknowledges that persistent budget deficits financed through borrowing at high servicing costs, especially from international sources, have plummeted the country into excessive debt.
Following the Heavily Indebted Poor Countries (HIPC) initiative and Multilateral Debt Relief Initiative (MDRI) period in 2006, Ghana’s public debt was GH¢4.9 billion or 26.2% of GDP. By end 2008, debt stock had risen to GH¢9.8 billion at 34.8% of GDP, driven by large fiscal deficit of 14.5% during the election year and cedi depreciation.
The upward trend continued with national debt reaching GH¢17.5 billion at 38.9% of GDP by end 2010, reflecting 78% increase from 2008. Between 2010 and 2012, government debt more than doubled to GH¢35.1 billion, increasing the debt to GDP ratio from 38.9% to 48.4% as expenditure demands consistently outpaced domestic resource mobilization.
Government has learned powerful lessons from the debt crisis. Never again must recklessness, waste and indiscipline define how public money is handled. The 2026 budget represents a turning point where short term stabilization gains are locked into permanent rules and institutions that prevent future fiscal crises.
Ghana’s debt risk has been reclassified from high to moderate, signaling restored confidence in the country’s ability to manage obligations sustainably. The reclassification opens access to commercial borrowing at more favorable terms while demonstrating to international investors that Ghana has addressed structural weaknesses that previously threatened default.
