The Minister of Finance, Dr. Cassiel Ato Forson, has stated that the previous government failed to provide any financial buffers to cushion Ghana against the heavy burden of debt servicing, leaving the country in a difficult economic position.
Presenting the 2025 Budget Statement to Parliament on Tuesday, March 11, Dr. Forson said “The previous government did not make provisions to ease the unprecedented debt service obligations we are now facing. Beyond domestic debt maturities, Ghana will be required to service external debt for the next four years.”
He highlighted the significant financial strain ahead, noting that “In the next four years, we will be required to pay US$8.7 billion, representing 10.9% of our GDP, with a particularly heavy concentration of payments in 2027 and 2028.”
Dr. Forson continued, expressing his disbelief at the lack of foresight: “Mr. Speaker, I do not understand how we allowed such a design to happen. This is a serious issue, but we will fix it.”
He pointed out that, despite the growing debt servicing obligations, no adequate buffers were put in place by the previous administration to alleviate the financial burden.
“There were no provisions to cushion the country against the debt servicing burden we are now facing,” he stressed.
He went on to discuss the state of the country’s debt reserves, saying, “After 7th January 2025, the debt service reserve account (sinking fund) had a balance of just US$6,400. When we left office, we had left US$319 in that same account.”
He also revealed that the debt reserve cedi account had a balance of GHS143 million when the previous administration handed over, but it now stands at GHS430 million.
He raised concerns about the impact of the previous administration’s bilateral debt restructuring efforts, which have led to the halting of 55 important projects.
“As a result of the restructuring, 55 projects have been halted, leaving US$3 billion in undisbursed loans and US$300 million in outstanding interim certificates,” he explained.
Some of the key projects affected include the Nkwanta Hospital, Kejetia Market Phase Two, and the Tema to Aflao Road. “The delay in payments and the demobilisation of workers on-site will result in a cost overrun of approximately US$1.1 billion,” Dr. Forson warned.
Due to the ongoing debt restructuring and the current IMF programme, Dr. Forson noted that “it will take a minimum of 12 years to complete all these stalled projects.” He further added, “If we continue with business as usual, it will take at least 12 years to resolve these challenges.”
Dr. Forson assured the House that the government would engage in discussions in the coming days to address the issue.
“We are committed to resolving these challenges and will begin working on solutions very soon,” he concluded.
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