Ghana is facing a tough year in managing its debt, with heavy repayment peaks in 2027 and 2028, according to the 2025 Budget and Economic Policy. As the country grapples with these domestic and external obligations, Kenya’s plan to convert dollar loans to yuan offers a potential blueprint for easing financial pressures.
For the current year, the Budget projected that domestic debt repayments would peak in February (GH¢9.9 billion), July (GH¢6.2 billion), and August (GH¢10.1 billion). On top of that, short-term Treasury bills totaling GH¢111.1 billion will need to be rolled over every week, creating pressure on cash flow.
As of August 19, 2025, Ghana has already made some progress. Finance Minister Dr. Ato Forson announced a successful coupon payment under the Domestic Debt Exchange Programme (DDEP) worth nearly GH¢9.7 billion. With this, total DDEP payments for 2025 have reached GH¢19.4 billion. Dr. Forson stressed that this shows the government’s commitment to keeping its promises to investors and supporting the country’s financial credibility.
The 2025 Budget also shows that Ghana has to pay US$8.7 billion in external debt over the next four years, which is about 10.9% of GDP. Most of this is due in 2027 (US$2.5 billion) and 2028 (US$2.4 billion), and because the debt is mostly in dollars, changes in exchange rates could make repayments even more expensive. To reduce risks, the government has set up two special sinking fund accounts, one in cedis and one in dollars. These funds are designed to make sure loans maturing in 2026, 2027, and 2028 can be paid on time.
What Kenya Did
Kenya’s experience provides a relevant reference for Ghana. By April 2025, Kenya’s total public debt stood at Ksh 11.49 trillion (USD 88.85 billion), with external debt accounting for Ksh 5.33 trillion, nearly half of the total stock. Bilateral loans made up Ksh 1.02 trillion, with China representing the largest portion. Kenya’s debt owed to China increased slightly from Ksh 651.65 billion in March to Ksh 651.98 billion in April 2025, mainly tied to the $5 billion Standard Gauge Railway project. By April, Kenya had already spent Ksh 511 billion on external debt service, with payments to Chinese creditors representing a significant share of that total.
In response, Kenya’s Treasury has begun talks with Beijing to convert dollar-denominated loans into yuan and extend repayment maturities, aiming to lower interest costs and reduce pressure on the national budget. This move illustrates the challenges of servicing large dollar-denominated loans in emerging markets, where currency fluctuations can significantly increase repayment obligations.
Considering Conversion
Ghana faces similar financial pressures, with external debt repayments heavily concentrated in the coming years and a large portion denominated in dollars. While Ghana is implementing a debt restructuring program under the G20 Common Framework, exploring targeted conversions or negotiations on some external loans, whether through alternative currencies, extended maturities, or lower interest rates, could help reduce exposure to currency fluctuations, ease repayment costs, and provide additional budgetary flexibility.
Ghana’s situation highlights the broader challenges for emerging markets with high dollar-denominated debt: repayment peaks, short-term rollover obligations, and limited financial buffers all increase the risk to economic stability. Kenya’s approach to restructuring Chinese loans offers a practical example of how countries in the region can explore strategies to manage debt pressures while maintaining fiscal sustainability.
