Ghana’s public debt stock has increased sharply in the first six months of 2026, new data from the Bank of Ghana has shown.
According to the central bank’s latest Monetary Policy Report, the country’s total public debt rose from GH¢641.11 billion at the end of December 2025 to GH¢719.52 billion by the end of June 2026.
This represents an addition of GH¢78.41 billion in just six months — an increase of more than 12 percent compared to the end-2025 figure.
Ghana’s Debt-to-GDP Ratio Now at 45%
In terms of the size of the economy, Ghana’s debt-to-GDP ratio increased slightly from 44.7% in December 2025 to 45% in June 2026.
The Bank of Ghana says the rise is part of a deliberate strategy by the government to build financial buffers ahead of large debt repayments expected in 2027 and 2028, while also financing the 2026 budget.
While the debt-to-GDP ratio saw only a modest rise, the sharp increase in absolute terms has implications for interest payments, government spending and fiscal stability.
Why Ghana’s Public Debt Increased
The Bank of Ghana attributed the GH¢78.41 billion increase to two main factors: domestic borrowing and exchange-rate effects on external debt.
Domestic Borrowing Drove Over 70% of the Increase
Domestic debt was the biggest contributor to the rise. It increased by GH¢57.36 billion, from GH¢333.76 billion in December 2025 to GH¢391.12 billion in June 2026. As of June 2026, domestic debt accounted for 54.4% of Ghana’s total public debt.
According to the report, the government borrowed more domestically to build up the Sinking Fund to prepare for maturing bonds in 2027 and 2028.
Other factors cited include:
The reopening of the domestic bond market in March 2026
Tap issuances of medium- and long-term government securities
The recapitalisation of the Bank of Ghana
The central bank noted that the government is taking advantage of relatively lower domestic interest rates, which it considers sustainable for now.
External Debt Rises in Cedi Terms Due to Depreciation
External debt also increased when measured in Ghana cedis. It rose by GH¢21.04 billion, from GH¢307.36 billion in December 2025 to GH¢328.40 billion in June 2026.
However, the Bank of Ghana explained that Ghana’s external debt actually declined in foreign currency terms due to principal repayments made during the period.
The increase in cedi terms was caused by the depreciation of the local currency against major foreign currencies. External debt now makes up 45.6% of total public debt.
Breakdown of Ghana’s External Debt
As of June 2026, the composition of Ghana’s external debt was as follows:
Multilateral creditors: 41.9%
International capital market debt: 29%
Bilateral creditors: 20%
Commercial creditors: 9.2%
Multilateral institutions remain Ghana’s largest external lenders.
Breakdown of Domestic Debt: Treasury Bills Dominate
On the domestic side, short-term instruments continue to dominate government borrowing:
Short-term instruments, mainly 91-day and 364-day Treasury bills: 41%
Medium-term instruments: 39.1%
Long-term instruments: 19.7%
The Bank of Ghana said strong investor demand for 364-day Treasury bills has kept short-term borrowing high. While this provides easy financing for the government, it also increases refinancing risk, as these bills must be frequently rolled over.
What This Means for Ghana’s Economy
The rise in Ghana’s public debt to GH¢719.52 billion highlights the delicate balance facing policymakers.
On the positive side, building buffers for 2027 and 2028 maturities could help the government avoid refinancing pressure and reduce the risk of default on maturing bonds.
On the other hand, every new borrowing adds future interest costs, which could reduce funds available for critical sectors such as health, education, roads and infrastructure.
Analysts say the success of the strategy will depend on prudent management of borrowed funds, strong revenue mobilisation by the Ghana Revenue Authority, sustained economic growth, discipline in government expenditure and stability of the Ghana cedi against the US dollar.
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Outlook for Ghana’s Debt Sustainability
The Bank of Ghana maintains that domestic borrowing costs remain relatively low and sustainable. However, it warns that this could change if interest rates rise sharply or investor confidence weakens.
For external debt, the cedi’s performance will be crucial. A stable cedi will help contain the cedi value of foreign debt, while further depreciation will inflate the debt stock even without new borrowing.
With public debt now at GH¢719.52 billion, Ghana’s ability to avoid another cycle of debt accumulation will depend on how well the government balances buffer-building with fiscal discipline.
Source: Isaac Kofi Dzokpo/capitalnewsonline.com
