Deloitte warns Ghana must ‘ring-fence’ new borrowing

Auditing giant Deloitte Ghana has urged the government to adopt a rigorous strategy of “ring-fencing its borrowing plans” as the nation prepares its much-anticipated re-entry into the domestic bond market.

The firm warns that despite recent, hard-won successes in stabilizing the country’s debt profile, any return to undisciplined borrowing could swiftly erode gains in debt sustainability.

Deloitte’s analysis of the 2026 Budget, delivered under the theme “Resetting for Growth, Jobs and Economic Transformation”, highlights that Ghana’s improving fiscal discipline, coupled with an appreciation of the Ghana Cedi (GHS), has created a “rare opportunity to reset its debt strategy.”

This opportunity, however, is conditional on future borrowing remaining targeted, prudent, and anchored in long-term economic reforms.

The firm’s data provides a clear picture of the significant progress achieved in addressing the country’s public debt distress over the first ten months of 2025:

The Debt Stabilization Scorecard: Dec 2024 to Oct 2025

This dramatic reduction in external debt—driven primarily by the Cedi’s appreciation and strong fiscal performance—combined with the stability in domestic debt, has signaled renewed confidence among international investors, leading to credit rating upgrades from agencies like Moody’s and Fitch.

The Warning: Debt Situation Remains Delicate

Despite the positive momentum, Deloitte stresses that Ghana’s debt-to-GDP ratio and overall debt situation remain delicate and highly sensitive to external shocks or undisciplined spending.

The concept of ring-fencing, as urged by the firm, requires the government to dedicate specific revenue streams (like those from a successful project) to pay back the debt incurred for that specific project.

This mechanism is designed to isolate the new debt and prevent it from becoming a systemic burden on the national treasury.

Deloitte’s Blueprint for Prudent Borrowing

To safeguard macroeconomic stability, the auditing firm issued specific, forward-looking recommendations for the government’s debt strategy:

1. Prioritize Concessional Financing: The government must prioritize concessional borrowing (low-interest, long-term loans) for key investments such as:
   • Large-scale infrastructure.
   • Climate-resilient projects.
   • Social development initiatives.
   • Simultaneously, the government must avoid expensive, short-term debt instruments that pose significant fiscal risks.
2. Commercial Backing for New Bonds: Any upcoming bond issuances must be backed by clear repayment plans and projected commercial returns. This is especially crucial for State-Owned Enterprises (SOEs), whose historic debt obligations have repeatedly strained public finances.
3. Transparency and Coordination in Buybacks: Tighter coordination between the Finance Ministry, investors, and international partners is necessary when implementing any future debt buyback operations. Deloitte stresses the importance of transparency and predictable engagement to prevent market disruptions.

Deloitte concludes that while a return to the bond market is a positive step toward normalization, its success hinges on strict fiscal adherence:

Deloitte concludes that Ghana’s planned return to the bond market can be positive, but only if borrowing is “reinforced for financing self-paying projects” and domestic interest costs are strictly controlled.

This disciplined approach, the firm argues, is the only way to safeguard the country’s hard-won macroeconomic stability and cement long-term fiscal discipline.

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