Ghana’s public debt rose sharply in the third quarter of 2025, increasing by approximately GH¢71.6 billion in just three months, as renewed depreciation of the cedi amplified the country’s foreign-currency obligations. Data from the Bank of Ghana, tracked by JoyNews Research, show total public debt climbed to GH¢684.6 billion by the end of September, reversing a GH¢156.4 billion decline recorded between the first and second quarters of the year.
The sharp rise follows a 24% fall in the cedi against the US dollar in Q3, after the currency had gained more than 40% in Q2. Finance Minister Cassiel Ato Forson had previously credited exchange rate appreciation and prudent debt management for reducing public debt from GH¢726.7 billion in December 2024 to GH¢613 billion by June 2025. Analysts, however, warn that exchange rate volatility remains a persistent risk, with currency losses historically contributing heavily to debt growth—accounting for 62.5% of the increase in 2023.
The recent surge in public debt carries significant economic implications. Rising debt levels could increase the government’s debt servicing obligations, potentially crowding out fiscal space for social spending, infrastructure development, and economic stimulus. Higher debt-to-GDP ratios may also affect Ghana’s sovereign credit ratings, raising borrowing costs and complicating efforts to attract foreign investment.
The currency-driven expansion of debt highlights the vulnerability of Ghana’s fiscal position to external shocks. Reliance on foreign-denominated obligations exposes the government to exchange rate fluctuations, and sustained cedi weakness could see public debt surpass GH¢700 billion by the end of 2025. Policymakers may need to strengthen hedging mechanisms, diversify funding sources, and implement structural reforms to reduce dependency on foreign currency borrowing.
Furthermore, the volatility underscores the interconnectedness of exchange rate management, inflation control, and fiscal policy. A depreciating cedi could exacerbate inflationary pressures, increase the cost of imports, and reduce real disposable income, further challenging macroeconomic stability. Analysts suggest that coordinated monetary and fiscal measures, including tighter currency management and strategic debt issuance, will be crucial to mitigate these risks.
Ghana’s rising debt amid cedi depreciation serves as a reminder of the delicate balance required between fiscal prudence, currency stability, and economic growth. Policymakers face a pressing need to implement measures that safeguard public finances while maintaining investor confidence and supporting sustainable economic development.
