Ghana’s Finance Minister disclosed the country will incur $8.7 billion in external debt services over four years, particularly in 2027 and 2028, without any financial buffers to ease this burden. The nation is recovering from a severe economic crisis, and President Mahama has vowed to improve the economy amid multiple ongoing challenges.
Ghana’s Finance Minister, Cassiel Ato Baah Forson, announced on Tuesday that the nation will confront substantial external debt service costs totaling $8.7 billion over the next four years, equating to 10.9% of the country’s GDP. He indicated that payment obligations will peak in 2027 and 2028, with the country required to pay $2.5 billion and $2.4 billion respectively during those years.
Forson expressed concern that despite these significant domestic and external debt obligations, Ghana has not established any financial buffers to mitigate the impact of these unprecedented costs. The country is recovering from its most severe economic crisis in a generation, exacerbated by the COVID-19 pandemic, the Ukrainian war, rising global interest rates, and years of excessive borrowing.
President John Dramani Mahama, assuming office in January, has committed to revitalizing the economy and stimulating job creation. He is, however, dealing with challenges posed by a cost-of-living crisis, an ongoing International Monetary Fund bailout, and a default on sovereign debt within Ghana’s cocoa and gold sectors.
In conclusion, Ghana is poised for challenging years ahead with significant external debt servicing costs, particularly in 2027 and 2028. The lack of financial buffers to cushion these obligations underscores the urgency of economic reforms. President Mahama’s administration faces the dual challenge of economic recovery while addressing the ongoing crises in both living standards and sovereign debt.
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