Ghana’s fiscal outlook, as projected by the World Bank and the International Monetary Fund (IMF), is poised for a major turnaround, offering hope for economic stability, investor confidence, and a boost in foreign direct investment (FDI).
Both the World Bank and the IMF have projected Ghana’s Debt-to-GDP to see a significant decline in the medium-term.
For the IMF, Ghana’s debt-to-GDP ratio is projected to rise to 66.4% by the end of 2025 before gradually decreasing to 62.7% in 2026. The World Bank also sees the country’s debt-to-GDP ratio rising to 66.4% by the end of 2025 before gradually decreasing to 62.7% in 2026 and further to 59.9% in 2027. This reflects a gradual reduction in the debt burden over the medium term.
For IMANI Africa, these projections are very favorable for the country’s economy.
In a critical analysis of these projections, the public policy think tank noted that this decline will create critical fiscal space, allowing the government to invest more heavily in infrastructure, social programs, and broader economic development without relying excessively on debt financing.
If fully realized, this shift could mark a turning point in Ghana’s economic narrative, positioning the country as an attractive destination for both domestic and international investors.
The analysis notes that achieving these targets will depend heavily on the successful continuation of debt restructuring efforts, improved tax revenue collection, and tight fiscal discipline.
Already, the Finance Minister, Dr. Cassiel Ato Forson, during recent meetings with investors in Washington, DC, unveiled a comprehensive fiscal reform plan aimed at cleaning up government payables in 2024, tightening debt management rules, and strengthening procurement controls.
These reforms, IMANI believes, could anchor long-term fiscal responsibility and enhance Ghana’s public financial management systems.
IMANI also points to the government’s ambitious medium-term target to reduce the debt-to-GDP ratio to 45% by 2035 as a critical milestone. Achieving this would not only solidify Ghana’s economic fundamentals but also send a strong message of stability and sustainability to investors.
This positive outlook of Ghana’s public debt stock, IMANI believes, sends a powerful signal of fiscal prudence and stability to investors.
The country, the think tank is optimistic, will see an enhanced investor confidence, and thereby will translate into foreign direct investment.
“A declining debt-to-GDP ratio sends a strong signal to both domestic and international investors that the government is committed to maintaining fiscal discipline and managing its debt sustainably,” IMANI noted in its critical analysis.
It continued that, “As Ghana’s debt burden eases, investor confidence is likely to improve, which could lead to increased foreign direct investment (FDI) and greater confidence in the domestic capital markets.”
With reforms underway and global investor sentiment warming, Ghana stands on the verge of a new era of economic opportunity, only if the momentum is sustained.
