Ghana’s Public Debt Rising Despite Macroeconomic Stabilization

Ghana has recorded significant macroeconomic improvements under its IMF-supported program, including exchange rate appreciation, declining inflation, and improved external balances. Yet, public debt after falling sharply in early 2025 has begun to rise again, increasing from 43.7% of GDP in May 2025 to 48.9 % by September 2025. This policy brief examines why public debt is rising despite stabilizing macroeconomic indicators and discusses the implications for fiscal sustainability.

Our analysis shows that the recent increase in debt reflects structural fiscal dynamics rather than macroeconomic slippage. Persistent expenditure–revenue gaps, continued reliance on domestic financing, high interest costs, and stock–flow adjustments are central drivers. While the IMF program has stabilized the economy, sustaining debt reduction will require deeper fiscal reforms beyond short-term stabilization.

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