Ghana's fiscal space remains limited despite economic gains - IERPP

The Institute of Economic Research and Public Policy (IERPP) is questioning whether Ghana's recent economic gains have translated into genuine fiscal space, warning that headline improvements may not reflect the country's underlying financial position. In an analysis authored by its Executive Director, Prof. Isaac Boadi, the institute said Ghana's improved debt-to-GDP ratio, lower inflation, and currency stability have created a positive outlook, but cautioned that significant constraints remain. Prof. Boadi stated that data from the Bank of Ghana's Summary of Economic and Financial Data released on July 21, 2026, presents a mixed picture of Ghana's fiscal position.

The analysis noted that Ghana's public debt-to-GDP ratio declined from 51.1% in April 2025 to 41.5% by January 2026, while inflation fell from 13.7% in June 2025 to 3.2% in March 2026. The Monetary Policy Rate was also reduced from 28% to 14%, and the cedi recorded significant appreciation during parts of 2025. Prof. Boadi argued that some of these improvements may not necessarily represent stronger fiscal fundamentals, explaining that the reduction in the debt ratio was partly driven by the rebasing of Ghana's Gross Domestic Product (GDP). He argued, "The debt ratio fell mainly because the denominator moved, not the numerator," adding that domestic debt in cedi terms continued to rise during the period under review.