Ghana’s Debt Obligations: A Breakdown of Domestic and External Repayments
Dr. Cassiel Ato Forson detailed Ghana’s upcoming debt obligations, specifically over GH¢150 billion in domestic repayments and over $8.7 billion in external debt due within four years. The country’s fiscal challenges predominantly occur in 2027 and 2028, raising concerns about economic stability. Despite this, he assured progress towards transforming Ghana’s economy.
The Minister of Finance, Dr. Cassiel Ato Forson, recently provided an update regarding Ghana’s debt repayment obligations over the next four years during the presentation of the 2025 Budget and Economic Policy statement. The nation faces domestic debt repayments exceeding GH¢150 billion, primarily due to the Domestic Debt Exchange Programme (DDEP) initiated by the Akufo-Addo administration.
Dr. Forson indicated that the domestic debt service obligations represent 11.6% of the GDP, with significant repayments due in 2027 and 2028; specifically, GH¢57.6 billion in 2027 and GH¢52.5 billion in 2028. He expressed concern over these looming fiscal burdens, likening them to “cancerous humps” that pose a considerable risk to the economy.
In terms of external debt, Dr. Forson stated that Ghana must pay over $8.7 billion, accounting for 10.9% of its GDP. Approximately 55% of this obligation is due for servicing in 2027 and 2028. He emphasized the heavy debt load expected in these years, promising to confront the challenges ahead in the interest of economic transformation.
The DDEP was initially announced by former Minister Ken Ofori-Atta in December 2022, as part of measures aimed at ensuring debt sustainability, allowing stakeholders until December 30, 2022, to participate in the exchange program. This initiative involved replacing existing domestic bonds with new bonds having extended maturity dates and various terms of interest, thereby managing the domestic debt obligations more efficiently.
In summary, Ghana’s financial obligations over the next four years are substantial, with Dr. Forson highlighting a domestic debt repayment exceeding GH¢150 billion and external debt obligations of $8.7 billion. The years 2027 and 2028 are particularly burdensome, accounting for a significant portion of these dues. The government’s commitment to addressing these challenges reflects a proactive stance toward economic recovery and sustainability.
Original Source: www.ghanaweb.com
