After a steady decline, Ghana’s public debt stock is creeping up again, raising questions about whether the government can keep the reins and maintain sustainable debt levels amid the tight IMF bailout conditions.
The latest Summary of Economic and Financial Data published by the Bank of Ghana (BoG) has revealed that July 2025 witnessed another hike in the country’s debt after a similar hike in June.
According to the BoG’s data, the total public debt stock increased to GH¢628.8 billion in July 2025, equivalent to 44.9% of GDP, compared to GH¢613.0 billion (43.8% of GDP) in June. This uptick follows several months of progress in trimming down the debt stock from over GH¢769 billion at the beginning of the year.
This means that between June and July 2025, the government added a total of GH¢15.2 billion to the total public debt stock.
Domestic vs. External Debt
A critical analysis of the data reveals that while domestic debt rose to GH¢323.7 billion in July, representing 23.1% of GDP, from GH¢312.7 billion in June, external debt dipped slightly to GH¢305.0 billion, falling to 21.8% of GDP, compared to GH¢300.3 billion (21.4% of GDP) the previous month.
The increase in domestic debt indicates that government financing has leaned more heavily on the local market, even as external debt servicing pressures remain.
The Debt Trend and the IMF Targets
Despite the rise, which is raising eyebrows, it is not that bad when compared to the IMF program target. Under the three-year extended credit facility, Ghana has committed to reducing its debt-to-GDP ratio to sustainable levels by capping it below 55% in present value terms by 2028.
On paper, the July figure of 44.9% of GDP looks well within that range. However, the recent uptick signals how fragile the gains are, and how quickly domestic borrowing could erode hard-won progress.
What It Means for Businesses and the Economy
Public debt numbers may appear abstract and far away to many people, but in an actual sense, they are not. Every increase in domestic debt often translates into higher government demand for funds in the local market, pushing up interest rates.
This crowds out private businesses from accessing affordable credit to expand or even survive. For exporters and importers, rising debt can also fuel exchange rate pressures since the government requires dollars to service external obligations.
Although Ghana has made significant progress from the high debt levels of 2022 and 2023, analysts fear that complacency could undo the turnaround. The July increase, though modest, is a reminder that discipline in spending and sticking to the IMF’s fiscal targets is non-negotiable.
The Bottomline
The July uptick may not yet be alarming, but it is a red flag. For Ghanaians and businesses already squeezed by high costs of credit, the trajectory of public debt remains a key determinant of whether the recent stability will be sustained or will be derailed.
