Ghana’s Finance Minister Highlights Significant External Debt Challenges

Ghana’s Finance Minister announced the country will incur $8.7 billion in external debt service over the next four years, with significant payments due in 2027 and 2028. The nation has not built buffers for this financial burden despite emerging from a deep economic crisis. The new President is focused on economic recovery and job creation.

Ghana’s Finance Minister Cassiel Ato Baah Forson addressed parliament, highlighting that the nation is confronted with significant external debt service payments over the next four years. He indicated that the total repayment will amount to $8.7 billion, which represents 10.9% of the GDP, with the bulk of these payments due in 2027 and 2028.

In his budget speech, Forson detailed that Ghana is expected to pay $2.5 billion in 2027 and $2.4 billion in 2028. He emphasized that no financial reserves have been established to mitigate the impacts of this unprecedented debt service burden, despite the looming domestic and external obligations.

The country is emerging from a severe economic crisis exacerbated by the COVID-19 pandemic, the conflict in Ukraine, rising global interest rates, and a history of excessive borrowing. President John Dramani Mahama, who assumed office in January, has pledged to revitalize the economy and create job opportunities amid the prevailing cost-of-living crisis and an ongoing bailout from the International Monetary Fund along with a sovereign debt default.

In summary, Ghana is facing substantial external debt service obligations, amounting to $8.7 billion over four years. The Finance Minister’s remarks reveal critical upcoming payments that could strain the nation’s fiscal position, particularly in 2027 and 2028. The government’s commitment to economic recovery amid persistent challenges highlights the urgency of addressing these debt burdens e resilience strategies.

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