Ghana’s Finance Minister Dr. Cassiel Ato Forson revealed the country must manage debt obligations of GH¢150.3 billion domestically and $8.7 billion externally over the next four years. The burdens are particularly heavy in 2027 and 2028, following adjustments made under the Domestic Debt Exchange Programme aimed at restructuring existing obligations to lessen financial strains on the economy.
Dr. Cassiel Ato Forson, Ghana’s Minister of Finance, presented details regarding the nation’s impending debt obligations during the 2025 Budget and Economic Policy statement. He reported that due to the Domestic Debt Exchange Programme (DDEP) initiated by the previous administration, the government must pay approximately GH¢150.3 billion in domestic debt, which is 11.6% of the country’s GDP, predominantly due in 2027 and 2028.
The financial burden highlighted that 73.3% of the domestic debt service obligation is slated for payment in 2027 (GH¢57.6 billion) and 2028 (GH¢52.5 billion). Dr. Ato Forson characterized these forthcoming obligations as critical “humps” that pose substantial risks to the economy, indicating financial strains will occur this fiscal year, particularly in February, July, and August.
Furthermore, the Minister revealed Ghana’s external debt obligations which total over $8.7 billion, translating to 10.9% of GDP. Approximately 55% of this external debt, or about $2.5 billion in 2027 and $2.4 billion in 2028, will need to be serviced, intensifying the financial challenge during these years.
The DDEP, launched by former Finance Minister Ken Ofori-Atta in December 2022, involved restructuring domestic bonds to manage debt load effectively. The programme replaced existing bonds with four new ones with various maturity dates and interest rates, aiming to alleviate immediate debt service pressures by rescheduling obligations.
The proposed arrangements included zero percent interest for 2023, increasing to 5% in 2024 and 10% in 2025, which will persist until the maturity of the bonds. Following domestic adjustments, efforts were also made to restructure external debt obligations to manage future financial viability effectively.
In summary, Ghana faces significant domestic and external debt service obligations over the next four years amounting to GH¢150.3 billion and $8.7 billion, respectively. The critical years for debt management will be 2027 and 2028, requiring substantial fiscal resources. The government is committed to addressing these challenges, despite the heavy financial burdens ahead, through structured debt management strategies initiated under the DDEP.
Original Source: www.ghanaweb.com
