Ghana Increases Domestic Debt Reliance, Per World Bank

Ghana has increasingly relied on domestic borrowing to finance its budget and manage debt pressures over the past decade, according to the International Debt Report 2025.

The report shows that public domestic debt has risen steadily in countries classified under the Low Income Country Debt Sustainability Framework, as governments seek to meet growing financing needs while reducing exposure to foreign exchange risks.

Ghana is cited as one of the frontier economies that successfully deepened its domestic debt market during this period, with the development of the local bond market being a key feature of this shift.

The World Bank noted that domestic borrowing has helped countries like Ghana manage widening fiscal deficits at a time of slow revenue growth and rising development needs.

However, the report cautions that rising domestic debt comes with new risks, including increased refinancing and interest rate pressures, especially in countries with limited fiscal space.

The World Bank said it will continue to support countries, including Ghana, to strengthen domestic debt markets with greater focus on capital market development and risk management.

As Ghana works to stabilise its economy and restore confidence, the report underscores the need for careful monitoring of domestic debt growth to safeguard long term debt sustainability.

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