Finance Minister Dr. Cassiel Ato Forson criticized the previous administration’s debt management strategies, highlighting the absence of financial buffers to mitigate the nation’s escalating debt servicing obligations.
Dr. Forson emphasized that the prior government failed to establish safeguards against unprecedented debt service obligations, leaving the country to face significant financial strain.
He noted that Ghana is required to service external debt amounting to $8.7 billion over the next four years, representing 10.9% of the nation’s GDP, with substantial payments concentrated in 2027 and 2028.
He expressed concern over the lack of foresight in allowing such a debt structure to develop without adequate provisions to cushion the financial burden.
The finance minister revealed that upon assuming office, the debt service reserve account held a balance of merely $6,400, a stark contrast to the $319 million balance left by the administration before them.
In response to these challenges, Dr. Forson outlined plans to establish an independent debt management office aimed at preventing future debt crises.
He acknowledged the severe toll past financial missteps have taken on the nation, referencing the difficult domestic debt exchange and the necessity of restructuring Eurobonds.
Hon Minister assured that his administration is committed to avoiding a recurrence of the 2022 financial crisis by collaborating with the Ministry of Finance and development partners to implement responsible fiscal policies.
Dr. Forson introduced a “shock therapy” approach, which includes removing poorly designed taxes and implementing targeted revenue generation measures to reduce the deficit.
He emphasized that the government aims to achieve a real GDP growth of at least 4% and reduce the inflation rate to 11.9% by the end of the year.
Finance Minister Dr. Ato Cassiel Forson underscore the critical need for prudent fiscal management and the establishment of robust financial safeguards to ensure the nation’s economic stability and resilience against future debt crises.
Story by Freedom Lavoe.
