Ghana’s national debt has seen a significant reduction of GH₵150 billion, thanks to the recent appreciation of the Ghanaian cedi. President John Dramani Mahama announced this development at the African Development Bank’s 60th Annual Meeting in Abidjan. The strong performance of the cedi, combined with strategic financial measures, has created optimism about achieving long-term debt sustainability ahead of schedule.
How the Cedi’s Appreciation is Impacting Ghana’s Debt
According to data from JoyNews Research, the cedi has appreciated by approximately 18% against the US dollar since January 2025. This appreciation has significantly lowered the external component of Ghana’s debt stock by around GH₵74 billion. Overall, the strengthening cedi is estimated to have reduced Ghana’s debt burden by 10%.
This marks a dramatic turnaround from 2022, when the falling cedi added GH₵93 billion to the national debt. Improved exchange rates are now easing pressure on external repayments, offering the government more fiscal space to invest in productive sectors.
Mahama Attributes Success to Strong Economic Management
President Mahama credited the debt reduction to financial reforms implemented by his administration over the past five months. These reforms include:
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Implementing strict fiscal and monetary policies
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Fostering investor confidence
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Maintaining spending discipline in an election year
“If that trajectory continues, the target of reaching 55 to 58 per cent debt sustainability by 2028 will be reached by the end of this year,” Mahama stated. “That means it gives us fiscal space to begin to invest in the most productive sectors of the economy.”
IMF Programme, Exports, and Policy Measures Drive Stability
Multiple factors have contributed to the cedi’s recent strength:
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IMF Support: Ghana’s $3 billion IMF programme comes with fiscal reforms and accountability measures, boosting international confidence.
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Increased Reserves: Ghana’s foreign exchange reserves rose from $6.1 billion in early 2024 to over $9.3 billion by February 2025.
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Export Growth: Revenue from gold and cocoa exports has surged, improving the country’s balance of payments.
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Monetary Policy: The Bank of Ghana has maintained strict control on spending and injected US dollars into the market to support importers.
Expert Insights on the Debt Reduction
Isaac Kofi Agyei, Lead Analyst at JoyNews, explained the direct impact of the cedi’s appreciation:
“The current appreciation of the cedi is expected to reduce the external component of Ghana’s debt stock by some GHS74 billion.”
In 2023, former Finance Minister Ken Ofori-Atta highlighted the opposite scenario:
“Our stock of debt increased by GHS93 billion this year alone due to the depreciation of the cedi.”
FAQs or Common Concerns
Q: How has the cedi’s appreciation helped reduce Ghana’s debt?
A: A stronger cedi means Ghana needs fewer cedis to repay dollar-denominated loans, lowering the overall debt burden.
Q: Is the debt reduction sustainable?
A: If current economic policies continue and external factors remain favourable, Ghana may achieve its debt sustainability target ahead of schedule.
Q: What role is the IMF playing?
A: The IMF’s $3 billion support programme includes fiscal reforms and spending limits, helping to stabilise the economy and attract investor confidence.
Q: How do exports affect the cedi’s strength?
A: Increased revenue from exports like gold and cocoa boosts foreign reserves and supports the cedi’s value against other currencies.
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