A Development Economist, Dr. Frank Bannor, asserts that the increasing trend in Ghana’s public debt cannot be attributed solely to the depreciation of the exchange rate.
Dr. Bannor emphasizes that it is dubious to suggest that during the period of what is referred to as better management of the cedi, there would be a resultant increase in public debt amounting to Ghc71 billion.
The public sector debt has surged by over GH¢70 billion within a mere three months.
Anosyst indicates that this situation reflects the pressures stemming from the cedi’s significant depreciation against the US dollar during the third quarter of 2025.
Ghana’s public debt rose by approximately GH¢71.6 billion in the third quarter, with forecasts suggesting that the total public debt could surpass GH¢700 billion by the year’s end if the cedi continues to face sustained pressure against the dollar.
Total public debt, which had decreased by GH¢156.4 billion between the first and second quarters, has now escalated to GH¢684.6 billion, largely driven by the renewed challenges faced by the cedi against the US dollar in Q3.
Dr. Bannor, who is also a Senior Research Fellow at the Institute of Economic Research and Public Policy (IERPP), stated in response to this situation, “This public debt figure of Ghc71 billion is questionable! I argue that the increase in public debt is not merely a result of exchange rate depreciation! Why? Even in 2022, when we experienced one of the cedi’s worst performances against the dollar, it is noteworthy that Ghana’s debt stock only rose by 67 billion Ghana cedis ($7.9bn) by the end of 2022 due to the cedi’s depreciation.
“Thus, it is indeed questionable that during this period of so-called better management of the cedi, there would be an increase in public debt of Ghc71 billion! What is the rate of depreciation in the third quarter of 2025 compared to that of 2022? It appears that someone is concealing the true cause of the public debt crisis behind this unfounded assumption! High borrowing from the domestic market is a plausible contributing factor!
