IMF forecasts Ghana’s debt-to-GDP ratio to reach 59% by end of 2025

The public debt burden continues to dominate discussions within international financial circles, as the International Monetary Fund (IMF) projects that the country’s Debt-to-GDP ratio will climb to 59.1% by the end of 2025.

This forecast, captured in the IMF’s October 2025 Fiscal Monitor Report released during the ongoing IMF/World Bank Annual Meetings in Washington D.C., reflects both cautious optimism and continued fiscal vulnerability in the post-debt restructuring period.

The IMF’s new projection of 59.1% is marginally lower than the 60% ceiling the government had set for 2025 under its medium-term fiscal framework. The Fund expects the ratio to gradually decline over the next three years—to 56.1% in 2026, 53.7% in 2027, and 51.3% in 2028—if current fiscal reforms and debt management strategies remain on track.

These projections suggest that by 2028, Ghana could outperform the 55% Debt-to-GDP target agreed under the Extended Credit Facility (ECF) Programme, the ongoing IMF-supported programme designed to restore debt sustainability and rebuild investor confidence following the 2022–2023 economic crisis.

Current Debt Situation and Trends

According to the Bank of Ghana’s Financial and Economic Data published in September 2025, the nation’s total debt stood at GH¢628.8 billion, representing 44.9% of GDP as of July 2025.

While this marks a reduction from the peak debt levels recorded in 2023, uncertainty remains about whether the figure will rise again before the year ends.

Economic analysts attribute the current moderation to successful debt restructuring efforts, both domestic and bilateral, which have reduced the government’s interest payment obligations.

However, they warn that renewed borrowing pressures or slow GDP growth could reverse the gains achieved so far.

Path To Debt Restructuring

The debt troubles intensified in late 2022 when the government defaulted on most of its external obligations amid a severe balance-of-payments crisis. Inflation surged to historic highs, and the cedi depreciated sharply, forcing authorities to seek a $3 billion IMF bailout in 2023.

Under the programme, Ghana embarked on a comprehensive Domestic Debt Exchange Programme (DDEP), restructuring over GH¢203 billion of local bonds.

Subsequent negotiations with bilateral creditors, coordinated through the Paris Club and China, aimed to secure relief on external loans to make debt service sustainable.

The government’s stated goal has been to bring the debt-to-GDP ratio below 55% by 2028 while ensuring that the public debt portfolio remains within manageable risk levels.

IMF Calls for Fiscal Discipline and Stronger Financial Management

At a press briefing in Washington, Davide Furceri, Deputy Division Chief at the IMF Research Department, underscored the need for Ghana to strengthen Public Financial Management (PFM) systems to prevent a relapse into debt distress.

He emphasised that the government must improve revenue mobilisation, particularly through enhanced tax administration and broader VAT compliance, to create fiscal space for infrastructure and social spending.

“The priority now is not just reducing debt but ensuring the reforms are institutionalised to avoid future crises,” Furceri said.

Government’s Position: Sustained Commitment to Fiscal Reforms

In a statement responding to the IMF’s report, the Ministry of Finance reaffirmed its commitment to fiscal consolidation and responsible borrowing.

It disclosed that Ghana had finalised restructuring agreements with six bilateral partners and was in the final stages of negotiations with its commercial creditors.

The Ministry also cited the Medium-Term Debt Management Strategy (2025–2028) as a critical framework guiding the government’s borrowing and refinancing operations. It aims to “provide an appropriate financing mix consistent with Section 57 of the Public Financial Management Act,” which mandates prudent debt management anchored in sustainability analysis.

Looking Ahead: A Fragile but Improving Outlook

The path to fiscal recovery remains fragile, but the IMF’s projections point to a gradual improvement in the country’s debt position—an outcome that could bolster investor sentiment and support economic growth if discipline is maintained.

Economists caution, however, that maintaining this trajectory will require continued transparency, restraint in public expenditure, and growth-oriented policies that expand the revenue base without overburdening taxpayers.