With Fitch Ratings forecasting significant liquidity pressures in 2025 and 2026, Ghana is facing increasing economic challenges.
The country’s interest-to-revenue ratio is expected to reach 29 percent and 30 percent, nearly double the average of 16 percent for other emerging African markets.
Economist Dr. Peter Terkper has underscored the serious consequences of these projections, pointing out that Ghana’s high debt levels and history of defaults have heightened its risk profile, resulting in higher borrowing costs.
While Fitch acknowledges the government’s efforts at fiscal consolidation, the agency has emphasized the urgent need for substantial reforms to stabilize the economy and manage its growing debt burdens.
” They are talking about interest revenue ratio estimated at 29 in 2025 and 30% in 2026. Now, when they look at the sovereign ratings, average within Africa. They are saying that this is around 16, so you are going to pay more than double what you are supposed to pay or you are going to pay about half of what you are supposed to pay.
“What it means is that, if you are earning thousand cedis every month, you are going to spend three hundred to pay your debts, then the seven hundred cedis is what you are going to live on. So there will be pressure if your income doesn’t go up. And so when your interest is increasing and your income is not, then there’s a challenge,” Dr. Terkper said.
Dr. Terkper continued, ” And that is where the real problem is that when Ghana had to default because you have defaulted, you have now become a high-risk country. So if anybody wants to give you money, they will charge you high interest because they don’t know what will happen.
So this is the reason why they are saying that our interest rate revenue ratio is estimated to be as high as 30%, in 2026 and 29% in 2025. So this is the reason your debt levels are high, you going to spend a lot to to borrow because of the risk profile that you have as a country.”
