The Minister of Finance, Dr. Cassiel Ato Forson
The Minister of Finance, Dr. Cassiel Ato Forson, has expressed concerns over Ghana’s debt situation and the significant financial obligations facing the government.
He noted that, in addition to large arrears and commitments, the fiscal situation is further complicated by substantial bullet debt service payments and limited financing options.
According to the minister, the government is burdened with servicing the country’s debts in the coming years due to the Domestic Debt Exchange Program.
Currently, the government’s financing options are restricted to the treasury bill market following the debt restructuring program.
Dr. Ato Forson made these remarks while presenting the 2025 Budget and Economic Policy in Parliament on March 11, 2025.
“Moreover, the forthcoming debt service obligations for both domestic and Eurobond debts will have profound implications for fiscal sustainability and the balance of payments,” he stated.
Ato Forson revealed that Ghana is expected to pay approximately GH¢150.3 billion in debt service alone by 2028.
“Mr. Speaker, the Domestic Debt Exchange Program has resulted in substantial domestic debt service payments. Over the next four years, the country is expected to pay about GH¢150.3 billion, representing 11.6% of GDP in domestic debt service obligations alone, with 73.3% of this amount due in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion),” he said.
According to him, the debt service obligations of 2027 and 2028 present major financial challenges.
However, he assured that “these humps are cancerous and pose significant risks to the economy, but we shall fix them!”
The debt service obligation for this financial year is also considerable, with significant payments due in February (GH¢9.9 billion), July (GH¢6.2 billion), and August (GH¢10.1 billion).
Ato Forson further stated, “Mr. Speaker, the fiscal challenges are compounded by the significant short-term treasury bill maturities we have inherited. These obligations, totaling approximately GH¢111.1 billion, require weekly rollovers, placing additional pressure on cash flow and liquidity requirements.”
On the external front, the minister outlined Ghana’s debt obligations as follows:
“Mr. Speaker, beyond domestic maturities, Ghana faces significant external debt service obligations over the next four years, totaling US$8.7 billion (10.9% of GDP), with a heavy concentration in 2027 and 2028.
“Additionally, 55% of the total external debt service amount—US$8.7 billion—is due in 2027 (US$2.5 billion) and 2028 (US$2.4 billion).”
He suggested that the debt restructuring undertaken by the previous administration was structured in a way that heavily loaded payments into 2027 and 2028.
“Mr. Speaker, despite these looming domestic and external debt service obligations, no buffers were put in place to cushion the unprecedented debt burden.
“As of January 7, 2025, the debt service reserve dollar account (Sinking Fund) had a balance of approximately US$64,000, compared to US$319 million in 2016, while the debt service reserve cedi account had GH¢143 million, down from GH¢430 million in 2016,” he revealed.
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Meanwhile, watch Sammy Gyamfi’s reaction to the 2025 Budget