Ghana needs a debt ceiling to avert future financial crises – Economist

A lecturer at the University of Ghana Business School, Dr Priscilla Twumasi Baffour, has called for the introduction of a debt ceiling to prevent excessive government borrowing, warning that Ghana’s economic stability depends on tighter fiscal controls.

Speaking on JoyNews’ Newsfile on Saturday, 15 March 2025, Dr Twumasi Baffour acknowledged signs of economic recovery but noted that it is happening against the backdrop of debt restructuring. 

She stressed the importance of managing Ghana’s debt burden carefully to sustain macroeconomic stability, which is essential for business growth and consumer confidence.

“At the National Economic Dialogue, one of the recommendations was the introduction of a debt ceiling, so that no government is allowed to borrow beyond a certain level,” she said.

She emphasised that stability in key economic indicators is crucial for restoring public trust. “Macroeconomic stability is the foundation of everything. If businesses are to thrive and consumer confidence is to rise, people must retain value in their incomes. This means controlling inflation, stabilising the currency, and lowering interest rates through the right channels,” she explained.

Dr Twumasi Baffour welcomed Finance Minister Dr Cassiel Ato Forson’s announcement of a review of the Fiscal Responsibility Act, describing it as a step in the right direction. However, she insisted that fiscal responsibility must go beyond policy pronouncements.

“There should be legislation to make the Fiscal Responsibility Committee legally binding, rather than having its members appointed at the discretion of the presidency,” she stated. “This will create real limits on executive spending and improve accountability.”

She acknowledged that while elements of these proposals appear in the 2025 Budget, their success will depend on proper implementation.

“These are medium to long-term plans, and we cannot achieve everything within a year,” she cautioned. “But at least, we can see traces of our recommendations in the budget, which shows that this was not just another talk shop.”