The significant drop in Ghana’s public debt as announced by the Minister of Finance, Dr Cassiel Ato Forson, is a welcoming development that signals a positive shift in the country’s economic fortunes.
According to the Minister, the country’s total public debt reduced from GH¢726.7 billion at the end of December 2024 to GH¢613 billion at the end of June 2025, a reduction of GH¢113.7 billion within a period of six months.
As stated by the Finance Minister, it is encouraging that for the first time in the country’s history, the rate of debt accumulation has turned negative, with a contraction of 15.6 per cent.
More importantly, the public debt-to-GDP ratio has also dropped significantly from 61.8 per cent at the end of last year to 43.8 per cent by mid-2025.
These figures reflect a strengthened fiscal position and a renewed commitment to responsible economic management.
This fiscal turnaround did not happen by chance. It is the result of deliberate policy actions, including the continuation of the three-year International Monetary Fund (IMF) programme, the implementation of the Domestic Debt Exchange Programme, and the support received from bilateral and commercial creditors.
While the IMF programme has been challenging due to its associated conditionalities, it has also proven to be necessary in restoring macroeconomic stability and investor confidence.
It is no secret that Ghana’s debt situation reached unsustainable levels in the recent past.
Just three years ago- that is in 2022, the country was grappling with soaring public debt, driven largely by uncontrolled borrowing, excessive public expenditure and the sharp depreciation of the country’s currency.
Much of the borrowed funds were used on recurrent expenditure rather than capital investments that could generate revenue and support long-term growth.
The consequences of such mismanagement were dire. The economy suffered severe setbacks including a sharp depreciation of the Ghana cedi, high inflation, rising interest rates, and loss of investor confidence.
According to Dr Forson, the root causes of the 2022 economic crisis were excessive fiscal dominance, reckless public spending, corruption, and lack of coordination between the Ministry of Finance and the Bank of Ghana under the previous administration.
These factors combined to push the economy to the brink, compelling the government to seek IMF support.
We commend the ruling government for choosing to avoid the blame game, but rather ‘resetting’ the economy through structural reforms and sound fiscal governance.
The decision to pursue responsible policy measures is now yielding results and the country is back on a path of fiscal consolidation and economic growth.
Provisional data as of end-June 2025 shows that Ghana recorded a surplus primary balance of 1.1 per cent of Gross Domestic Product on a commitment basis, exceeding the target of 0.4 per cent.
The overall fiscal deficit on the same basis was 0.7 per cent of GDP, compared with a target of 1.8 per cent. On a cash basis, the deficit stood at 1.1 per cent, again significantly better than the projected 2.4 per cent.
This performance reflects improved expenditure control, with actual spending amounting to GH¢109.7 billion, 14.3 per cent below the programmed figure of GH¢128 billion.
The government has also made strides in containing non-interest expenditure and validating arrears before disbursement.
The Finance Minister disclosed that this validation has resulted in a 61-per cent saving on capital expenditure in the first half of 2025 alone. However, while we commend this effort, we urge the government to ensure that review processes are fast-tracked to avoid project delays and cost overruns.
We join calls by stakeholders such as Deloitte Ghana for comprehensive public financial management reforms.
These include strict adherence to the Public Financial Management Act by Ministries, Departments and Agencies, cleaning the public payroll to recover unearned payments, and engaging proactively with labour unions to avoid industrial disruptions.
We at The Ghanaian Times entreats the government to stay the course.
While the recent gains are encouraging, there is no room for complacency. With large debt servicing obligations projected for 2026 through 2028 and short-term Treasury maturities reaching GH¢137 billion, continued fiscal discipline is crucial.
The government must intensify efforts to broaden the tax base, improve revenue mobilisation, and ensure that all public spending is underpinned by value-for-money principles.
The lessons of the past must not be forgotten.
Ghana’s economy is on the path to recovery. It is our hope that the government will maintain this momentum, continue to build credibility, and pursue sound fiscal policies to control public debt.