Amin Adam warns cedi depreciation could reverse Ghana’s debt relief gains

Former Finance Minister Dr Mohammed Amin Adam has cautioned that Ghana's recent debt relief could be at risk due to fluctuations in the exchange rate, changes in commodity prices, and slower economic growth. Despite the increase in the cedi's value in 2025, which reduced the cedi value of external debt by GH¢125.3 billion, the debt situation worsened between January and July 2026.

External debt decreased by approximately US$600 million in dollar terms but rose by GH¢14.8 billion when measured in cedis. This suggests that the exchange rate weakened by about 6% during the same period.

Dr Amin Adam highlighted that such currency fluctuations can impact reported debt figures, even when the underlying foreign-currency obligations remain unchanged. He warned that a more significant reversal in the exchange rate, coupled with weaker commodity prices or slower economic growth, could quickly increase the debt ratio and debt-service burden.

For sustainable debt improvement, he emphasized the need for more than favorable exchange-rate movements and high gold prices. Instead, it requires durable primary surpluses, reliable revenue collection, disciplined expenditure commitments, and financing at manageable maturities and yields for the country. Dr Amin Adam further recommended that debt statistics should distinctly differentiate between new borrowing, valuation effects, arrears recognition, and reclassification.

This would provide policymakers and the public with a more accurate understanding of Ghana's fiscal position.