"Ghana's Public Debt Falls to GH¢761.0bn in November 2024

Ghana’s total public debt has seen a significant reduction, dropping by GH¢24.1 billion month-on-month to GH¢761.0 billion in November 2024, according to the latest Summary of Financial and Economic Data from the Bank of Ghana (BoG) published in January 2025. This decline is largely attributed to external debt restructuring efforts that have successfully reduced the country’s external debt obligations.

In terms of foreign currency, the nation’s total public debt stood at US$47.9 billion in November 2024, marking a decrease from US$51.6 billion in the same period of the previous year. The reduction in the debt stock has positively impacted Ghana’s debt-to-GDP ratio, which currently stands at 72.2%, down from higher levels in prior months. This adjustment highlights the efforts to stabilize the country’s fiscal health and manage its borrowing more effectively.

The report provided a more detailed breakdown of the country’s debt composition, noting that Ghana’s external debt amounted to US$27.6 billion as of November 2024, down from US$30 billion during the same period in 2023. The external debt component had previously been recorded at US$32.0 billion in both September and October of 2024, indicating a steady reduction in this area, thanks in part to restructuring negotiations with international creditors.

On the domestic front, however, the situation is slightly different. Domestic debt has risen substantially, reaching GH¢311.7 billion by November 2024. This represents about 30.5% of the country’s GDP, a notable increase from GH¢275.8 billion in February 2024. The rise in domestic debt is primarily attributed to continued borrowing through the treasury market. Despite efforts to manage external debt, the reliance on domestic borrowing has escalated, further stressing the need for comprehensive fiscal management strategies.

The BoG’s report also highlights the growing challenge of managing domestic debt, as the government has had to tap into the domestic market more frequently to meet its financing needs. The increased domestic borrowing could potentially place additional pressure on the local financial markets and crowd out private sector credit, which may affect the broader economic environment.

One of the key factors behind the reduction in Ghana’s external debt stock is the restructuring agreements that the government has entered into with its international creditors. The restructuring process has allowed the country to extend its debt maturities and achieve more favorable terms, alleviating some of the immediate pressure on its foreign debt obligations. These efforts have been essential in reducing the country’s external debt burden, though the road to long-term debt sustainability remains challenging.

The country’s fiscal strategy continues to focus on reducing reliance on external borrowing while addressing the ballooning domestic debt. While the reduction in external debt is seen as a positive development, the increasing domestic debt presents a dual challenge. The government will need to find a balance between managing domestic and external debt while ensuring that economic growth continues.

Looking ahead, Ghana’s public debt management will need to focus on strengthening its domestic revenue generation capabilities, improving debt servicing strategies, and promoting fiscal discipline. The government’s ability to manage both domestic and external debt effectively will be critical in maintaining macroeconomic stability and ensuring sustainable economic growth.

As the government navigates these challenges, the Bank of Ghana’s data underscores the importance of continued fiscal reforms and prudent borrowing practices. The gradual reduction in external debt is a positive step, but the rise in domestic debt calls for careful attention to avoid further financial strain in the future.

Overall, the decline in Ghana’s total public debt in November 2024 represents a step forward in the country’s efforts to manage its fiscal challenges. However, balancing the growing domestic debt and the need for sustainable growth will remain a significant challenge for the government as it works toward ensuring a stable economic future.