Ghana debt restructuring gains face 2027 2028 risk
The Investment Bank of Africa warns Ghana's debt sustainability could be challenged by significant maturities, urging proactive management.
Ama Mensah | StatsGH |
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The IBA identified the 2027-2028 maturities as a major risk to Ghana's fiscal outlook. It urged the government to begin preparations immediately to prevent renewed pressure on the country's finances and borrowing costs. The report recommended pre-funding these maturities through primary budget surpluses, liability management operations, and concessional or multilateral support. This proactive approach aims to solidify the gains made from recent debt restructuring efforts.
This warning comes as Ghana seeks to consolidate fiscal improvements following its domestic and external debt restructuring. The country is also gradually working to restore normal access to capital markets. The IBA stressed that Ghana must carefully manage its return to the domestic debt market. This careful management is crucial to avoid recreating the conditions that led to previous debt difficulties. The report recommended publishing a medium-term domestic debt issuance and sinking-fund plan while gradually lengthening maturities.
The Investment Bank of Africa stated, "The debt trajectory has improved, but durable access requires prudent borrowing, transparency and pre-funded maturity management." This highlights the delicate balance Ghana must maintain between accessing capital and ensuring long-term debt sustainability. The report also cautioned against an abrupt return to expensive short-term borrowing. Such borrowing could increase refinancing pressures and undermine the improvements in debt sustainability.
For external debt, the IBA urged the government to complete outstanding official and commercial restructuring agreements with "comparability and transparency." It also stressed ensuring no hidden collateral arrangements or side agreements exist. The report warned against using Ghana's improved fiscal position as justification for aggressive new borrowing. It stated, "Ghana’s fiscal space is real but conditional," emphasizing that lower debt ratios should not lead to a new cycle of guarantees or low-return capital spending.
The IBA's central scenario projects Ghana's public debt-to-GDP ratio declining from 45.1% in 2026 to 36.8% by 2034. This positive trajectory, however, relies heavily on continued fiscal discipline and successful implementation of reforms. The report recommends maintaining a primary surplus, clearing arrears, and executing a credible debt rollover strategy. These steps are essential for normalizing market access and expanding fiscal space.
The report also places restrictions on new non-concessional borrowing. It recommends such borrowing only for projects with strong economic returns, foreign-exchange-generating capacity, or import reduction potential. These projects should undergo an "independent economic return and debt-service test." The IBA also called for greater transparency regarding Ghana's debt obligations. This includes publishing instrument-level debt, arrears, guarantees, and State-Owned Enterprise exposures. An investor data room should reconcile debt information from the Ministry of Finance, the Bank of Ghana, and SOEs.
Beyond the debt stock, the report identified several fiscal risks that could undermine improvements. These include State-Owned Enterprises, energy arrears, the cocoa sector, and government guarantees. The energy sector, in particular, remains a significant concern. The IBA estimates payments to independent power producers for energy shortfalls at GHS 19.7 billion, equivalent to 1.2% of GDP. Energy and cocoa reforms are essential to prevent Ghana's stabilization gains from being absorbed by recurrent losses and arrears.
Ghana's dependence on commodity revenues also presents a vulnerability to the debt outlook. Gold remains the country's largest export and an important anchor for reserve accumulation. The IBA calls for the debt position to be tested under lower gold prices. The cedi also remains a key risk, with a 7.9% depreciation against the US dollar in the first half of 2026. The report recommends building natural foreign-exchange hedges and reserves rather than defending an unsustainable exchange rate level.