Ghana Faces Significant External Debt Service Challenges, Finance Minister Reports
Ghana’s Finance Minister Cassiel Ato Baah Forson announced on Tuesday that the nation will incur significant external debt service costs totaling $8.7 billion over the next four years, primarily in 2027 and 2028. Amidst an ongoing economic crisis compounded by various global factors, the government is seeking to stabilize the economy and address the cost-of-living crisis.
Ghana’s Finance Minister, Cassiel Ato Baah Forson, revealed on Tuesday that the nation will encounter substantial external debt service costs in the upcoming four years. The total payment is projected at $8.7 billion, which equates to 10.9% of the country’s Gross Domestic Product (GDP), with the heaviest payments scheduled for 2027 and 2028.
Specifically, Minister Forson indicated that payments would amount to $2.5 billion in 2027 and $2.4 billion in 2028. He expressed concern that no financial buffers have been established to mitigate this unprecedented debt service burden, despite the looming domestic and external obligations.
Ghana is recovering from its most severe economic crisis in decades, which has been exacerbated by the COVID-19 pandemic, the geopolitical impacts of the war in Ukraine, rising global interest rates, and prolonged excessive borrowing practices. President John Dramani Mahama, who assumed office in January, is committed to revitalizing the economy and generating employment amidst challenges such as a cost-of-living crisis and an ongoing bailout from the International Monetary Fund.
In conclusion, Ghana is facing a significant external debt service burden projected to reach $8.7 billion over the next four years. The nation’s economic recovery is hampered by previous excessive borrowing and global economic challenges. The government, under President Mahama, is actively seeking solutions to navigate the financial difficulties while addressing pressing societal needs.
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