Ghana’s interest payments will average a high 20% of government revenue over the next four years, ratings agency S&P Global Ratings has disclosed, marking a dramatic improvement from the crisis-era peak that pushed the country into default in 2022.
The forecast, which covers the period through 2029, represents a significant easing of Ghana’s debt service burden, which consumed nearly 48% of government revenue in 2021 and averaged 44% in the five years leading up to the December 2022 default. The reduction is underpinned by the combined effects of Ghana’s sweeping debt restructuring programme, the cedi’s exchange rate appreciation in 2025, and lower local currency financing costs as inflation and local interest rates fell to multiyear lows.
From Crisis Peak to Consolidation
The improvement reflects one of the most comprehensive sovereign debt restructurings in Africa’s recent history. Ghana defaulted on its external debt in December 2022 after a severe fiscal and balance-of-payments crisis, with interest payments having consumed almost half of all government revenue the year before. The government subsequently launched the Domestic Debt Exchange Programme (DDEP) in December 2022, exchanging approximately GHS137 billion of domestic notes and bonds for new instruments maturing in 2027, 2029, 2032 and 2037.
The restructuring included a 0% coupon in 2023, stepping up to 5% in 2024 and 10% from 2025 onwards. By September 2023, the DDEP had resulted in the exchange of GHS203 billion and saved GHS61 billion in debt service. Ghana completed its Eurobond restructuring in October 2024, and the remaining Saderea health-sector bonds—worth approximately $117.8 million—are set to be swapped for new government notes maturing in 2035 and 2037, bringing the restructuring to roughly 97% completion of the debt Ghana sought to overhaul.
Inflation and Interest Rates at Multi-Year Lows
The fiscal turnaround has been supported by a sharp disinflation process. Inflation, which averaged 31% a year over 2022-2024, receded to 3.2% in March 2026—the closest on record to Ghana’s lowest-ever rate—before rising modestly to 5% at the end of August 2026. The surge in inflation during the crisis years was partly driven by the Bank of Ghana providing direct financing to the government in the lead-up to and during the debt crisis.
The decline in inflation has enabled the Bank of Ghana to cut its policy rate from 28% in June 2025 to 14% by mid-2026, a cumulative easing of 14 percentage points. Treasury bill rates have fallen in tandem. The 91-day, 182-day and 364-day T-bill rates declined sharply to 5.3%, 7.2% and 11.3% respectively by June 2026, compared with 14.7%, 15.3% and 15.8% a year earlier. Interest rates on Ghana’s six-month treasury bills have fallen to about 6.5%, and its one-year bills to 10.1%, from almost 30% at year-end 2024.
Currency Gains and Persistent Risks
The cedi’s performance has been a critical factor. The currency appreciated by approximately 30% against the US dollar in 2025, supported by rising export volumes and favourable prices for gold and cocoa. Although the exchange rate has weakened by 9.2% since the start of 2026, S&P noted that it remains 43% stronger than its lowest point. In November 2024, the cedi had dropped to GH¢16.47 to US$1. By the end of 2025, it had strengthened to GH¢10.45, though it has since depreciated to approximately GH¢11.55 by September 2026.
Return to Longer-Term Borrowing
The Ministry of Finance imposed a three-year ban on the issuance of new medium- or long-term domestic bonds following the domestic debt restructuring, forcing the government to rely almost exclusively on short-term instruments. In 2026, the government began issuing longer-tenor bonds once again. S&P said this should help lengthen the maturity profile of Ghana’s local currency debt and reduce rollover risks.
The return to longer-term issuance is a key element of the government’s strategy to rebuild confidence in Ghana’s debt sustainability. S&P has commended the administration, which assumed power in January 2025, for instituting fiscal rules alongside enhancements to public financial management, including a mandated 1.5% of GDP primary surplus annually and a target to reduce debt to 45% of GDP by 2034.
IMF Programme Anchors Reform
Ghana’s fiscal consolidation and structural reforms are anchored by a US1.9 billion under the arrangement, supporting Ghana’s efforts to restore macroeconomic stability and debt sustainability while laying the foundations for higher and more inclusive growth.
Fiscal Slippage and External Risks Remain
Despite the improvement in debt service costs, S&P warned of persistent risks. The agency underscored the dangers of fiscal slippage, particularly during election periods, and noted that Ghana remains vulnerable to external shocks due to its reliance on agriculture, which accounts for 20% of GDP, and gold exports, which comprised over 60% of goods exports during the first half of 2025.
The conflict in the Middle East is also cited as a threat that could erode some of the recent gains by causing inflation and financing costs to rise while increasing pressure on the cedi. Rising global oil prices and heightened geopolitical uncertainty could reignite imported inflation and weigh on the exchange rate, complicating the Bank of Ghana’s monetary policy stance.
S&P maintains Ghana’s sovereign credit rating at ‘B-/B’ with a stable outlook, reflecting the country’s gradual rehabilitation in international credit markets following its December 2022 default. The rating remains constrained by weak institutional arrangements, elevated government debt levels, and high debt service costs relative to peers, but the trajectory of improvement has been acknowledged by the agency.
Outlook
While Ghana’s interest burden remains high in absolute terms, the decline from crisis-era levels marks a significant fiscal consolidation achievement. The government’s ability to sustain this trajectory will depend on continued fiscal discipline, the successful return to longer-term domestic borrowing, and the resilience of the cedi against external headwinds. With debt payments of approximately US$9 billion due in 2027 and 2028, maintaining the downward trend in debt service costs is critical to preserving Ghana’s hard-won macroeconomic stability.
