BY Grace Zigah
Deloitte Ghana is cautioning the government against its plan to return to the capital markets, despite the improved macroeconomic environment and upgrades by international credit rating agencies.
The professional services firm advises the government to learn from historical mistakes and avoid a repeat of the debt hangover experienced over the last three years.
Debt Reduction Progress
The total public debt reduced by GH¢113.7 billion, representing a 15.6% decrease from GH¢726.7 billion at the end of December 2024 to GH¢613 billion in June 2025.
This significant decline in the debt-to-GDP ratio from 78.5% in December 2021 to 43.8% in June 2025 reflects an improvement in debt sustainability.
Prudent Debt Management
Deloitte emphasizes the need for prudent debt management, recommending that the government moderates its reliance on foreign debts and channels inflows into strategic capital investments that can support loan repayment.
The firm also suggests accelerating efforts to establish cash buffers in a sinking fund for loan repayment and providing regular updates to enhance investor confidence.
Improved Debt Sustainability
The improvement in debt sustainability is expected to induce better ratings from international credit rating agencies, driving up investor confidence in the economy.
The government’s commitment to honouring debt obligations as they fall due is a positive step towards maintaining economic stability.
To avoid past mistakes, Deloitte recommends that the government:
– Moderates Foreign Debt: Strictly channel foreign debt inflows into strategic capital investments.
– Enhance Investor Confidence: Provide regular updates on the sinking fund’s position.
– Improve Debt Sustainability: Continue to prioritize debt management and sustainability.
