Ghana slashes debt by GH¢100billion in a year, ratio plunges to 44.5% of GDP

New data from the Bank of Ghana has revealed an improvement in the nation’s fiscal health, with the public debt burden showing a dramatic decline relative to the size of the economy over the past year. 

The latest Summary of Economic and Financial Data, released on January 27, 2026, indicates that stringent fiscal management is altering the macroeconomic landscape, creating a more stable foundation for potential growth.

The figures show that Ghana’s total public debt stood at GH¢644.6 billion in November 2025, which translates to 44.5 per cent of Gross Domestic Product (GDP).

This marks a stark improvement from the ratio of 63.1 per cent of GDP recorded in November 2024, representing a reduction of approximately 18 percentage points in just twelve months. In nominal terms, the debt stock decreased from GH¢742.5 billion a year earlier.

This sharp contraction in the debt-to-GDP ratio is attributed to a combination of fiscal consolidation and robust nominal GDP growth. A breakdown shows external debt was pegged at US$29.3 billion (GH¢319.2 billion), constituting 22.5 per cent of GDP, while domestic debt was GH¢311.0 billion, or 22.0 per cent of GDP. The data indicates a broad-based moderation from previous highs.

The driver behind this improvement is a pronounced fiscal tightening. Government revenue mobilisation strengthened, with “Total Revenue & Grants” reaching 13.4 per cent of GDP by November 2025, of which “Domestic Revenue” accounted for 13.3 per cemt. Concurrently, there was a marked restraint in expenditure, which was contained at 13.9 per cent of GDP, down from 16.6 per cent a year earlier. This discipline yielded a positive “Primary Balance (Cash)” of 1.9 per cent of GDP, demonstrating an ability to cover interest costs and reduce borrowing needs. The overall fiscal deficit on a cash basis narrowed substantially to -1.4 per cent of GDP from -5.2 per cent in November 2024.

This fiscal recalibration coincides with a remarkable disinflationary trend. Year-on-year inflation for “All Consumer Prices” plummeted to 5.4 per cent in December 2025, down from 23.8 per cent in December 2024. In response, the Bank of Ghana has aggressively cut its key policy rate, the “Monetary Policy Rate,” which fell from 27.00 per cent at the end of 2024 to 18.00 per cent by December 2025. This has transmitted into lower market rates, with the “Average Lending Rate” declining from 30.25 per cent to 20.45 per cent over the same period.

The combined effect of lower debt, reduced deficits, and easing inflation and interest rates presents a nuanced outlook for businesses. While “Capital Expenditure” remains subdued at 0.9 per cent of GDP, limiting immediate public infrastructure contracts, the broader environment is shifting. Reduced government borrowing is alleviating the crowding-out effect in the financial system, potentially freeing credit for the private sector. “Private Sector Credit” growth, while still modest in real terms, turned positive in the latter half of 2025.