Exchange rate depreciation not sole cause of GH₵71bn debt rise – IERPP Economist
Development economist and Senior Research Fellow at the Institute of Economic Research and Public Policy (IERPP), Dr. Frank Bannor, has questioned claims that exchange rate pressures alone pushed Ghana’s public debt up by more than GH₵70 billion within three months.
His comments follow the publication of data by JoyNews Research, sourced from the Bank of Ghana and dated December 15, 2025, which attributed a GH₵71.6 billion rise in public debt to exchange rate pressures.
Reacting in a Facebook post on Monday, December 15, 2025, Dr. Bannor described the explanation as doubtful, stating plainly that “this public debt data of Ghc71 billion is questionable.”
He argued that exchange rate depreciation, by itself, cannot sufficiently explain the magnitude of the increase. “I contend that the rise in public debt is not solely to exchange rate depreciation!” he wrote.
To support his position, Dr. Bannor drew a comparison with 2022, a year widely regarded as one of the most turbulent periods for the cedi. “Even in the year 2022 where we witnessed one of the worst performance of the cedi against the dollar, recall that Ghana’s debt stock increased by only 67 billion Ghana cedis ($7.9bn) as at the end 2022 due to the depreciation of the cedi,” he noted.
Based on this comparison, he questioned the logic behind the latest figures. “It is therefore questionable that in the era of so-called better management of the cedi it would yield an increased public debt of Ghc71 billion!” he stated.
Dr. Bannor further challenged analysts and policymakers to provide concrete data to justify the claim, asking, “What is the rate of depreciation in the 3rd quarter of 2025 compared to that of 2022?”
He cautioned against what he described as an attempt to oversimplify the drivers of Ghana’s debt situation. “Someone is hiding behind this loose assumption to hide the true cause of the public debt crisis!” he asserted.
According to him, a more realistic explanation lies elsewhere, adding that “high borrowing from the domestic market is a plausible factor.”
