Ato Forson Reports Debt Up But Ratio Falls
Ghana’s public debt stock has climbed to GH¢674.1 billion as of February, yet the burden relative to the size of the economy has eased, signaling a recalibration in the country’s fiscal trajectory. Data from the Bank of Ghana shows that while nominal liabilities expanded, the debt-to-GDP ratio contracted, reflecting stronger growth and tighter budget management.
According to the Summary of Economic and Financial Data released for May, the total debt in dollar terms reached $63.1 billion, up from the December position. External obligations held steady at $29.3 billion, accounting for 19.6% of GDP and indicating limited new foreign borrowing over the period.
The domestic component drove the overall increase, rising to GH¢360.4 billion from GH¢341 billion the previous month. That expansion represents about 22.6% of GDP and points to the government’s continued recourse to the local market to finance operations and smooth expenditure pressures. The reliance on domestic instruments has been a defining feature of fiscal strategy as authorities navigate post-program financing.
Fiscal metrics also showed marked improvement. The deficit-to-GDP ratio narrowed to 0.3% in March, while the primary balance swung to a surplus of 1.2% of GDP. That primary surplus is critical, as it denotes the government’s capacity to service obligations before interest payments and is closely watched by investors assessing sustainability.
The declining debt ratio comes at a pivotal juncture. Ghana has transitioned from an International Monetary Fund bailout arrangement to a Policy Coordination Instrument, a framework that emphasizes surveillance and policy credibility without fresh financing. The combination of a lower debt-to-GDP ratio and a primary surplus could bolster market confidence and reduce risk premia on future issuances.
For Finance Minister Dr. Cassiel Ato Forson, the numbers present both validation and caution. The trajectory suggests stabilization, but the rising domestic stock underscores the need for revenue mobilization and expenditure discipline to prevent refinancing risks. The coming quarters will test whether this moderation can be sustained as the economy pursues growth without eroding fiscal buffers.
Source: Bank of Ghana
Author: Korkor Anumu
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