Editorial: Fiscal turnaround as debt falls…

Ahead of President Mahama’s second State of the Nation Address under his second term presidency on February 27 this year, government has announced what it describes as one of the most significant economic turnarounds in Ghana’s history; citing strong fiscal consolidation, sharp declines in inflation and interest rates, currency appreciation and a substantial reduction of public debt in 2025.

In an official statement issued in Accra on Monday this week, it stated that the 2025 fiscal year marked a decisive reversal of the economic pressures which characterised the end of 2024.

“At that time, the primary balance on a commitment basis stood at a deficit of 3.0 percent of GDP, the 91-day Treasury bill rate had climbed to 27.7 percent, the Ghana cedi had depreciated by 19.2 percent against the US dollar and inflation was at 23.8 percent.”

A combination of fiscal discipline, strict commitment controls, structural reforms and prudent monetary policy restored macroeconomic stability and placed public finances back on a sustainable path, it noted.

The 2025 fiscal outturn significantly outperformed targets. The overall fiscal balance on a commitment basis recorded a deficit of 1.0 percent of GDP, better than the 2.8 percent target. The primary balance on commitment basis improved to a surplus of 2.6 percent of GDP, exceeding the programmed surplus of 1.5 percent.

One of the most notable developments was a reduction in public debt. Ghana’s total public debt stock declined by GH¢82.1billion from GH¢726.7billion, equivalent to 61.8 percent of GDP in December 2024, to GH¢641billion – representing 45.3 percent of GDP in December 2025.

Officials described this reduction as one of the sharpest debt declines recorded in the country’s history.

Interest rates have also eased significantly. The 91-day Treasury bill rate fell from 27.7 percent at the end of 2024 to 11 percent by December 2025 and further to 6.5 percent in February 2026. The average commercial bank lending rate declined from 30.25 percent in 2024 to 20.45 percent for 2025.

Government says the lower rates have reduced borrowing costs and improved credit conditions for the private sector. Credit to the private sector expanded by GH¢17.1billion in 2025, with further growth projected for 2026.

The Ghana cedi appreciated by 40.7 percent against the US dollar by end-December 2025, reversing the 19.2 percent depreciation recorded in 2024. The currency also gained 30.9 percent against the pound sterling and 24 percent against the euro.

Additionally, the country’s external position strengthened considerably – with the current account recording a surplus of US$9.1billion at the end of December 2025 compared to            US$1.5billion in 2024. Gross international reserves reached US$13.8billion, sufficient to cover 5.7 months of imports.

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