Imagine a country slashing its public debt by a staggering GH¢82.1 billion in a single year – one of the most dramatic fiscal turnarounds in its history. But here's where it gets controversial: is this a sustainable victory, or just a temporary reprieve? Let’s dive into the numbers and uncover the story behind this remarkable shift.
In 2025, Ghana’s public debt plummeted from GH¢726.7 billion (61.8% of GDP) in December 2024 to GH¢641 billion (45.3% of GDP) by the end of the year. According to the finance ministry, this was no accident. It was the result of tighter spending controls and improved macroeconomic conditions, which together bolstered the government’s financial health. And this is the part most people miss: the fiscal turnaround wasn’t just about cutting costs; it was about smarter management and strategic reforms.
The government’s fiscal discipline paid off in multiple ways. The overall fiscal deficit shrank to just 1.0% of GDP in 2025, far below the 2.8% target. Meanwhile, the primary balance swung into a surplus of 2.6% of GDP, surpassing the 1.5% goal. These achievements reflect a combination of revenue mobilization reforms, spending restraint, and prudent monetary policy. But is this level of austerity sustainable in the long term?
Contrast this with the situation at the end of 2024, when the primary balance was in deficit by 3.0% of GDP, inflation was soaring at 23.8%, and the 91-day Treasury bill rate stood at a whopping 27.7%. The cedi had also weakened significantly against the U.S. dollar, depreciating by 19.2%. Fast forward to 2025, and the picture looks entirely different.
Inflation, for instance, has nosedived. Consumer price growth declined for 13 straight months, dropping from 23.5% in January 2025 to just 3.8% in January 2026. Interest rates followed suit, with the 91-day Treasury bill rate falling to 6.5% by February 2026. Commercial bank lending rates also eased, dropping from 30.25% in 2024 to 20.45% in 2025. With inflation now at 3.8%, authorities are optimistic that lending rates will continue to fall, reducing borrowing costs and boosting private sector activity.
Speaking of the private sector, credit expanded by GH¢17.1 billion in 2025, thanks to improved liquidity and lower interest rates. The government expects this trend to continue in 2026 as financial conditions become even more favorable. But here’s a thought-provoking question: will this increased credit lead to productive investments, or could it fuel speculative bubbles?
Currency stability has also seen a remarkable turnaround. The cedi appreciated by 40.7% against the U.S. dollar by the end of 2025, erasing the previous year’s losses. It also strengthened against the pound sterling (30.9%) and the euro (24%). Externally, the current account surplus jumped to US$9.1 billion in 2025, up from US$1.5 billion in 2024, while gross international reserves climbed to US$13.8 billion, covering 5.7 months of imports.
Economic growth accelerated too, with real GDP expanding by 6.1% year-on-year in the first three quarters of 2025, driven by services and agriculture. Non-oil growth reached 7.5% during the same period, up from 5.8% in 2024. The Finance Ministry hailed 2025 as a year of broad-based macroeconomic recovery, pledging to maintain fiscal discipline and structural reforms to sustain these gains, create jobs, and support economic transformation.
But here’s the million-dollar question: Can Ghana maintain this momentum in the face of global economic uncertainties and potential domestic challenges? Authorities have signaled their commitment to debt sustainability, revenue reforms, and prudent monetary coordination. However, the road ahead is far from certain. What do you think? Is Ghana’s economic turnaround a model for others to follow, or are there hidden risks lurking beneath the surface? Share your thoughts in the comments below!
