Cedi Strength Masks Ghana’s $11.9bn Debt Surge in 2025

Ghana’s public debt profile in 2025 reveals a striking contrast, with a stronger cedi masking a sharp surge in external borrowing, according to latest data from the Bank of Ghana (BoG).

The country’s total public debt in dollar terms jumped by $11.9 billion within the year, rising from $49.4 billion in December 2024 to $61.3 billion by December 2025. The increase reflects sustained borrowing and expanded fiscal activity despite ongoing economic reforms.

However, in a surprising twist, the debt burden declined in local currency terms. Public debt dropped from GH¢726.7 billion to GH¢641 billion over the same period, largely due to the cedi’s significant appreciation.

The local currency strengthened from GH¢14.70 to the US dollar in December 2024 to GH¢10.45 by end-2025, following aggressive interventions by authorities, who injected over $11 billion into the foreign exchange market.

This dual trend has reshaped Ghana’s fiscal outlook. While the stronger cedi has eased domestic debt servicing pressures and helped stabilise inflation, the rising dollar-denominated debt presents underlying vulnerabilities.

With the economy valued at about $111 billion, Ghana’s debt-to-GDP ratio now stands near 55 percent in dollar terms, underscoring the growing weight of external obligations.

Balancing relief and risk
The appreciation of the cedi has offered immediate fiscal relief by lowering the local currency cost of servicing external debt. This has also supported price stability, reducing the cost of imports for businesses and households.

Yet, analysts caution that the gains may be temporary. A reversal in the cedi’s strength could significantly increase debt servicing costs, as most external obligations are tied to the US dollar.

Such a scenario would put pressure on foreign reserves and constrain government spending, particularly on critical development projects.

Policy trade-offs intensify
Government’s reliance on forex interventions to stabilise the cedi highlights an active but delicate debt management strategy. While the approach has boosted investor confidence and improved market liquidity, its sustainability remains uncertain.

External shocks, including global financial tightening or commodity price volatility, could quickly erode the cedi’s gains and expose the true scale of Ghana’s debt burden.

The developments reinforce the urgency for stronger fiscal discipline, enhanced domestic revenue mobilisation, and more efficient public spending to maintain debt sustainability.

Outlook
Ghana’s 2025 debt dynamics reflect a complex balancing act between currency stability and rising borrowing. While the stronger cedi has provided short-term breathing room, the growing stock of dollar-denominated debt signals deeper structural risks.

Going forward, policymakers face the critical task of sustaining economic stability without over-reliance on currency support measures, ensuring that debt levels remain manageable while supporting long-term growth.