“Ghana’s Public Debt Drops by GH¢113.7 Billion – Debt-to-GDP Now 43.8%”
By: Nana Kwasi Roka
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has announced a significant drop in the country’s public debt stock by GH¢113.7 billion, bringing the debt-to-GDP ratio down to 43.8% – a major turnaround that signals progress in restoring macroeconomic stability.
Delivering the 2025 Mid-Year Budget Review in Parliament on Thursday, July 24, Dr. Forson described the achievement as “historic,” citing that Ghana is currently experiencing a negative debt accumulation rate of 15.6% for the first time in the Fourth Republic.
“Mr. Speaker, this is the steepest decline in Ghana’s debt trajectory in decades,” he emphasized.
Breakdown of the Gains:
According to the finance minister, the decline in debt stock is the result of a mix of:
● Successful debt restructuring exercises under the IMF-backed programme,
● Prudent borrowing policies and
● Strong primary budget performance.
The figure reflects both external and domestic debt combined and is based on the new GDP rebasing and updated macroeconomic forecasts.
From Debt Distress to Recovery
This comes after Ghana, in 2022 – under the “incompetent” leadership of Nana Addo Dankwa Akufo and Dr Bawumia was classified as a high-debt-distress country, with public debt exceeding GH¢600 billion and a debt-to-GDP ratio above 70%. The government, under intense pressure, entered a staff-level agreement with the IMF and began a comprehensive domestic debt exchange programme (DDEP), followed by external debt negotiations with bilateral and commercial creditors.
Now, in just six months of President John Dramani Mahama’s exceptional leadership into the recovery programme, Dr. Forson insists the results are clear:
“We are not just slowing the pace of debt accumulation – we are reversing it,” he said. “Every cedi saved from debt means more room for roads, schools, and jobs. This is real fiscal space.”
Economic Analysts React
Economists and policy analysts have largely praised the decline, with some describing it as a vote of confidence in Ghana’s fiscal reforms. They claim “Bringing debt to below 50% of GDP so quickly is a remarkable feat. But the challenge now is maintaining it while stimulating growth.”
What It Means for Ghanaians
If sustained, the declining debt levels could lead to:
● Lower interest payments on debt (freeing funds for development),
● Improved investor confidence and
● Better credit ratings for Ghana – which would ultimately reduce the cost of borrowing.
Dr. Forson emphasized that this was only the beginning of a disciplined fiscal path and urged all government agencies to remain committed to expenditure controls and value-for-money audits.
“This is how we move from a crisis economy to a productive economy,” he concluded.