IMF Maintains Ghana’s High Risk of Debt Distress Classification Despite Significant Improvement in Debt Trajectory
The International Monetary Fund (IMF) says Ghana’s debt trajectory has improved significantly, supported by a stronger macroeconomic outlook and sustained fiscal discipline, although debt-related risks remain elevated.
In its Staff Report prepared for the Executive Board’s consideration of Ghana’s Fifth Review under the US$3 billion Extended Credit Facility (ECF) arrangement and Financing Assurances, the Fund noted that the country’s debt stock and debt service burden are declining faster than initially anticipated.
According to the IMF, the mechanical signal from the Debt Sustainability Analysis (DSA) suggests that Ghana could return to a moderate risk of debt distress in 2025. However, the Fund said it has applied judgment to maintain Ghana’s classification at high risk of debt distress, citing lingering vulnerabilities.
“These include large prospective domestic financing needs and exposure to commodity-driven exchange rate volatility,” the report said, warning that a premature upgrade could undermine the credibility of the risk assessment if unexpected shocks materialise.
The IMF, therefore, indicated that it will reassess Ghana’s medium-term debt outlook once the ongoing debt restructuring is completed and macroeconomic stabilisation is firmly entrenched.
Meanwhile, data from the Bank of Ghana (BoG) show that Ghana’s public debt rose by GHS 71.6 billion in the third quarter of 2025, pushing the total debt stock to GHS 684.6 billion (US$55.1 billion) as of September.
According to the BoG’s Summary of Economic and Financial Data for the period ending November 2025, the increase notwithstanding, Ghana has made substantial progress in reducing its overall debt burden compared to the previous year.
The latest figures show that the debt-to-GDP ratio rose to 48.9 per cent, up from 43.8 per cent in June, based on an estimated nominal GDP of GHS 1.4 trillion. In nominal terms, total public debt increased from GHS 613 billion in June.
However, between January and September 2025, Ghana reduced its total public debt by GHS 67.5 billion, while year-on-year data point to a sharper decline of GHS 125.4 billion compared to September 2024.
External debt was the main driver of the third-quarter increase, rising to GHS 367 billion from GHS 300.3 billion in June. Despite the quarterly uptick, external debt has recorded steep declines over longer periods, falling by GHS 432 billion year-to-date and GHS 508.6 billion year-on-year. External debt now represents 26.2 per cent of GDP.
Domestic debt remained broadly stable during the period, increasing marginally to GHS 317.6 billion from GHS 312.7 billion in June, with only modest changes on both year-to-date and annual comparisons.
The IMF said while recent debt dynamics are encouraging, maintaining fiscal discipline and completing the debt restructuring process will be critical to locking in gains and reducing Ghana’s exposure to future shocks.
