Key points:
- Ghana’s external debt hits $8.7bn by 2028
- No financial buffers in place, Forson warns
- Economic recovery faces major challenges
GHANA is facing a daunting external debt service burden of $8.7bn over the next four years, according to Finance Minister Cassiel Ato Forson. Speaking during his first budget presentation to parliament on Tuesday, Forson warned of significant repayment pressures that will strain the country’s finances, with peak payments scheduled for 2027 and 2028.
Debt payments to spike in 2027 and 2028
Forson detailed the repayment timeline, revealing that Ghana will need to pay $2.5bn in 2027 and another $2.4bn in 2028. The total debt obligations amount to 10.9 percent of the country’s Gross Domestic Product (GDP).
‘The next four years will see Ghana called upon to pay $8.7bn, with heavy concentration in the years 2027 and 2028,’ Forson told lawmakers.
Despite these looming obligations, the Finance Minister pointed out that no financial safety nets have been established to cushion the nation from the impact of this debt load.
‘In spite of all these upcoming domestic and external debt service obligations, no buffers were built to cushion this unprecedented debt service burden,’ Forson added.
Ghana’s economic crisis deepens
Ghana’s economic woes have deepened in recent years, largely due to a combination of external shocks and domestic policy missteps. The country is still reeling from its worst financial crisis in a generation, triggered by the Covid-19 pandemic, the war in Ukraine, surging global interest rates, and years of excessive borrowing.
The debt crisis culminated in a sovereign default, and Ghana continues to rely on an IMF bailout programme to stabilise its economy. Inflation remains high, while the cost-of-living crisis has eroded household incomes across the country.
Mahama’s administration faces tough road ahead
President John Dramani Mahama, who assumed office in January, has pledged to revitalise the economy and create much-needed jobs. However, his government faces a complex set of challenges, including meeting the strict conditions attached to the ongoing IMF support programme.
As Ghana’s debt repayments loom, analysts warn that without comprehensive economic reforms and sustainable fiscal management, the country’s financial recovery could stall.
Mahama’s administration is under pressure to navigate the economic fallout while addressing widespread public discontent linked to rising living costs and unemployment. The cocoa and gold-rich nation must also rebuild investor confidence following its recent debt default.
Path forward requires strategic planning
With external debt repayments weighing heavily on Ghana’s economic outlook, policymakers will need to find ways to increase revenue, manage spending, and build fiscal buffers. Finance Minister Forson’s sobering assessment has highlighted the urgency of decisive action to prevent further economic instability.
*A full review of the budget follows soon
