Ghana’s public debt has hit a new low, at least in recent memory, sparking renewed confidence for the country’s infrastructure financing.
The latest Bank of Ghana’s July 2025 Summary of Economic and Financial Data has confirmed that the country’s debt-to-GDP ratio has fallen to 43.8%, down from over 90% in 2022.
What makes this development striking is that Ghana is now significantly ahead of schedule in meeting the IMF’s 55% debt-to-GDP target by 2028, achieving almost 12 percentage points below that benchmark three years early.
This fiscal turnaround is further supported by positive credit rating outlooks from global agencies, which have taken note of Ghana’s improving debt sustainability and policy discipline.
With this milestone that signals macroeconomic recovery, the question many are asking is whether this development opens an opportunity for the country to borrow to finance critical infrastructure.
Many analysts believe the milestone opens the door to prudent and purposeful borrowing, especially for critical infrastructure development.
Debt Discipline & Fiscal Balancing Pay Off
Ghana’s public debt has declined from over GH¢744 billion in mid-2024 to GH¢613 billion by June 2025, a substantial reduction of GH¢131 billion in just one year. External debt now constitutes less than 50% of total debt, a key metric international lenders and investors watch to gauge a country’s exposure to foreign exchange risk.
This decline is driven by a mix of currency appreciation, fiscal consolidation, and successful debt restructuring efforts with both bilateral and commercial creditors.
Ghana’s participation in the G20 Common Framework and negotiations with bondholders have led to more manageable repayment schedules, while steady primary surpluses and controlled spending have anchored macroeconomic stability.
Is it time to invest in Productive Infrastructure?
Experts have already cautioned that the improvement in debt indicators should not translate into reckless borrowing. Hence, economists have warned the government to rein on borrowing and reckless expenditure.
However, the development creates fiscal space to borrow wisely, targeting high-impact, productivity-enhancing projects.
This means that with a debt-to-GDP of 44% far ahead of the IMF target of 55% in 2028, improved credit ratings, the country now has a healthier balance sheet.
This gives the country a window to undertake a wise and targeted borrowing at relatively better terms for infrastructure like roads, energy, logistics, and even digital connectivity.
Market Confidence Returns
With the cedi gaining strength, inflation cooling, and investor sentiment on the mend, Ghana’s macroeconomic credibility is rebounding.
The drop in debt-to-GDP enhances the country’s image on global markets, making it more attractive to multilateral and institutional investors.
Despite the positive signals, the country must tread cautiously. Analysts warn that external shocks and global rate fluctuations could still derail progress. However, the numbers suggest Ghana is now in a much better position to finance its development agenda without endangering its hard-won stability.
For now, Ghana stands at a pivotal point to leverage its leaner debt profile into long-term, inclusive economic transformation.
