Ghana’s external borrowing for 2025 is capped at $250 million under a new IMF guideline. The borrowing limit supports ongoing debt restructuring efforts, including Eurobond exchanges. Finance authorities are focusing on prioritizing funding for critical projects. This cap complicates the government’s infrastructure commitments while restructuring debt gets underway.
Ghana is now limited to borrowing a maximum of $250 million in external loans for the year 2025, as stipulated by a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC). This borrowing cap is established as a structural benchmark within Ghana’s International Monetary Fund (IMF) program, enabling the IMF to monitor the nation’s compliance annually.
The MoU, endorsed by all involved creditor nations, sets the framework for enforcing the $250 million cap on disbursements. This cap is an integral element of Ghana’s comprehensive debt restructuring initiative, initiated in 2022 when the country halted external debt servicing. It also corresponds with the restructuring of Eurobonds, involving an exchange of $13.1 billion in outstanding obligations for new debt instruments.
To manage the borrowing limit effectively, the Ministry of Finance is working with bilateral creditors to ensure funds are directed to urgent ongoing projects. In preparation for the borrowing cap, government agencies have been instructed to omit any externally funded capital expenditure (CAPEX) from their budgets for 2025 until the Ministry can confirm its priority project list.
The imposition of this borrowing restriction poses a considerable hurdle for the newly elected National Democratic Congress (NDC) administration. The party previously promised extensive infrastructure development during its campaign, now constrained by substantial restructured debt commitments. President John Mahama has announced plans not to extend the IMF program beyond its conclusion scheduled for May 2026, as reported at the Munich Security Conference in February 2025.
Additionally, Ghana is actively negotiating with commercial creditors, such as Eurobond holders, to finalize restructuring agreements that adhere to the principle of comparability of treatment among creditors. This ongoing process aims to stabilize the nation’s finances while fulfilling structural benchmarks established by the IMF.
Ghana’s borrowing cap of $250 million for 2025 is a critical measure within its debt restructuring framework. This limitation is designed to help monitor compliance with the IMF program and prioritize funding for essential projects amidst significant debt restructuring efforts. Balancing infrastructure commitments with imposed financial constraints remains a challenge for the current administration as it navigates these fiscal policies.
Original Source: www.ghanaweb.com
