Ghana’s Debt Obligations: An Overview of GH¢150m Domestic and $8.7b External Payments in the Coming Four Years

Ghana’s Finance Minister, Dr. Cassiel Ato Forson, announced that the country must repay over GH¢150 billion in domestic debt and $8.7 billion in external debt over the next four years, primarily during 2027 and 2028. He emphasized the risks associated with these obligations while expressing confidence in the government’s capacity to address them effectively.

In a recent update, Dr. Cassiel Ato Forson, Ghana’s Minister of Finance, discussed the country’s significant debt obligations resulting from the debt restructuring initiated during the Nana Addo Dankwa Akufo-Addo administration. Over the next four years, Ghana will need to address more than GH¢150 billion in domestic debt, primarily due in 2027 and 2028.

Dr. Ato Forson emphasized that more than 73% of the total domestic debt service payments, estimated at GH¢150.3 billion, will be required during these two years, with GH¢57.6 billion due in 2027 and GH¢52.5 billion in 2028. “The debt service obligations of 2027 and 2028 are major humps… These humps are cancerous and pose a significant risk to the economy.”

Additionally, the country is expected to settle over $8.7 billion in external debt during the same timeframe, representing 10.9% of GDP, with significant lump sums in 2027 and 2028. “Again, 55% of the total external debt service of US$8.7 billion is due to be serviced in 2027 and 2028,” he remarked.

The debt situation will impose considerable pressures on Ghana, but Dr. Ato Forson assured Ghanaians of the government’s commitment to overcoming these challenges and revitalizing the economy. He detailed that prior debt exchange programs, announced by former Finance Minister Ken Ofori-Atta, involved the replacement of existing domestic bonds with new securities. This included various maturity dates and interest rates set to alleviate immediate financial burdens and ensure sustainable repayment options.

In summary, Ghana faces substantial domestic and external debt obligations over the next four years, with critical payment periods in 2027 and 2028. The Finance Minister’s insights reveal the magnitude of fiscal challenges ahead, but also convey a message of optimism regarding potential economic recovery and restructuring measures. Emphasis on government initiatives may provide a pathway for sustainable economic management despite these significant hurdles.

Original Source: www.ghanaweb.com