Dr. Cassiel Ato Forson discussed Ghana’s impending debt obligations totaling over GH¢150 billion domestically and $8.7 billion externally due within the next four years. Significant repayments are concentrated in 2027 and 2028. The government aims to manage these heavy debts, promising a restructuring initiative to stimulate economic recovery.
In his address concerning Ghana’s financial outlook, the Minister of Finance, Dr. Cassiel Ato Forson, provided a comprehensive overview of the country’s imminent debt obligations resulting from recent restructuring efforts. Specifically, he addressed the debts the nation is anticipated to repay within the next four years, owing to the Domestic Debt Exchange Programme instituted by the previous administration.
Dr. Forson highlighted that the government must repay over GH¢150 billion from 2027 to 2028 due to the Domestic Debt Exchange Programme. He stated, “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 obligation alone, of which 73.3% is due in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion).”
He described the years 2027 and 2028 as significantly burdensome, indicating that these years present “major humps” in debt obligations that could jeopardize the economy. Additionally, he noted considerable domestic debt service requirements throughout the current financial year, with substantial payments scheduled in February, July, and August.
Moreover, Dr. Forson provided insights into external debt obligations, which exceed $8.7 billion over the same four-year time frame. He remarked, “Ghana faces significant external debt service obligations over the next four years totaling US$8.7 billion… with heavy concentration in 2027 and 2028.”
He revealed that 55% of this external debt service is expected to occur in the same debt-heavy years of 2027 and 2028. Despite these daunting challenges, Dr. Forson expressed confidence in the government’s ability to rejuvenate Ghana’s economy amidst these financial pressures.
In discussing the specifics of the Domestic Debt Exchange Programme, former Minister Ken Ofori-Atta previously laid out measures to stabilize the country’s finances in December 2022. This included a programme that restructured existing domestic bonds, promoting a transition to new securities with varying interest rates linked to future years.
As other metrics, these new bonds are set to mature in stages up to 2037, with differing interest rates aimed at easing the repayment burden temporarily. Following the successful implementation of the Domestic Debt Exchange, the focus expanded to encompass the restructuring of external debts, aiming to ensure both internal and external financial sustainability for Ghana.
In summary, Ghana faces significant debt obligations exceeding GH¢150 billion domestically and $8.7 billion externally over the next four years, primarily concentrated in 2027 and 2028. These financial commitments arise from recent debt restructuring initiatives. Minister Dr. Cassiel Ato Forson assures that the government is prepared to tackle these challenges decisively. The successful management of these obligations will be crucial for the nation’s economic recovery and sustainability.
Original Source: www.ghanaweb.com
