Ghana’s government will spend about 20% of its revenue on debt interest payments every year for the next four years, according to S&P Global Ratings.
This is a big drop from 2021, when Ghana spent nearly half its revenue—48%—just on servicing its debt. The US-based ratings agency attributes the improvement to debt restructuring, a stronger cedi, and lower local interest rates.
In November 2024, the cedi hit a low of GH¢16.47 to the US dollar. Since then, the currency has recovered. Although it weakened by 9.2% at the start of 2026, it remains 43% stronger than its lowest point. This has helped reduce the cost of debt in foreign currency.
Inflation has also fallen sharply. It averaged 31% a year between 2022 and 2024, partly because the Bank of Ghana directly financed the government during the debt crisis. But by March 2026, inflation dropped to 3.2%, close to the lowest rate on record for the country. It later rose slightly to 5% by the end of August 2026.
Lower inflation helped bring down local interest rates. Interest on six-month treasury bills fell from almost 30% at the end of 2024 to about 6.5%. One-year bills dropped to 10.1%. This reduced the cost of rolling over Ghana’s domestic debt.
The Ministry of Finance banned new medium- and long-term domestic bonds for three years after December 2022’s domestic debt restructuring. The government began issuing longer-term bonds again in 2026. S&P said this should help extend the average maturity of local currency debt, easing pressure on the government’s finances.
But challenges remain. The ongoing conflict in the Middle East may push inflation and financing costs higher. It could also weaken the cedi, threatening some of the recent gains.
S&P’s forecast that interest payments will consume 20% of revenue over the next four years shows that Ghana’s debt burden remains heavy, even after restructuring and economic improvements. The government will need to watch these risks closely as it manages its debt going forward.
According to Joy Online.
