Dr. Cassiel Ato Forson announced Ghana’s debt obligations of over GH¢150 billion domestically and $8.7 billion externally within the next four years, mainly concentrated in 2027 and 2028. These debts stem from the Domestic Debt Exchange Programme initiated by the previous government, posing significant economic risks, although the current administration pledges to address these issues effectively.
During the presentation of the 2025 Budget and Economic Policy Statement, Dr. Cassiel Ato Forson, the Minister of Finance, provided an overview of the debt obligations that Ghana will face in the upcoming four years as a consequence of the debt restructuring led by the government of Nana Addo Dankwa Akufo-Addo. He indicated that the Domestic Debt Exchange Programme (DDEP) necessitates payments exceeding GH¢150 billion between 2027 and 2028.
Dr. Ato Forson emphasized that the DDEP has created significant domestic debt service payments, with projections indicating a requirement of approximately GH¢150.3 billion over four years, amounting to 11.6% of GDP. Of this obligation, 73.3% is expected to be paid in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion). He referred to these payments as “major humps” that present substantial risks to the economy.
The Minister further revealed that Ghana’s external debt service obligations will exceed $8.7 billion over the next four years, accounting for 10.9% of the GDP, concentrated heavily in 2027 and 2028. Notably, 55% of this external service obligation is due in these two years, specifically $2.5 billion in 2027 and $2.4 billion in 2028.
Dr. Ato Forson asserted that these years will be particularly burdensome, labeling the responsibilities imposed by past government actions as detrimental. Nonetheless, he expressed optimism about the Mahama administration’s ability to address these challenges and improve Ghana’s economic conditions.
Regarding the Domestic Debt Exchange Programme initiated by former Minister Ken Ofori-Atta on December 4, 2022, the program included measures to improve debt sustainability with a defined participation window until December 30, 2022.
This program involved an exchange of existing domestic bonds for four new ones, which will mature at different intervals (2027, 2029, 2032, and 2037), coupled with varied interest rates ranging from 0% to 10%. Following this domestic restructuring, steps were also taken towards addressing the external debt obligations.
In summary, Ghana faces substantial debt service obligations exceeding GH¢150 billion in domestic debts and $8.7 billion in external debts spanning the next four years, particularly intensifying in 2027 and 2028. The financial burden raised significant concerns about economic risks, prompting Minister Dr. Ato Forson to assure the public of the government’s commitment to effectively managing these challenges. The Domestic Debt Exchange Programme was instituted to enhance debt sustainability in light of these matters.
Original Source: www.ghanaweb.com
