Ghana now spends less than 20% of revenue on debt servicing – Ato Forson
Finance Minister Cassiel Ato Forson says Ghana has significantly reduced the share of government revenue used to service debt, creating more room for spending on infrastructure and social services.
Ghana now spends less than 20% of its revenue on servicing public debt, down from about 50% at the peak of the country's debt crisis, Finance Minister Cassiel Ato Forson says.
Dr Forson said the reduction had eased pressure on government finances and created more fiscal space for investment in schools, hospitals, roads and other infrastructure.
“At its peak, we were spending about 50 percent of our revenue on debt servicing. This meant less money for schools, hospitals, roads, and other infrastructure. That was unsustainable,” he said.
“Today, I am proud to say that we have made considerable progress. We are now spending less than 20 percent of our revenue on servicing debt.”
The Finance Minister was speaking at the signing of an agreement between Ghana and Belgium to restructure debt owed to Belgium's export credit agency.
The reported reduction in the debt-servicing burden comes after years of severe pressure on Ghana's public finances, during which a large share of government revenue was required to meet debt obligations.
Dr Forson said the lower debt-servicing requirement would allow the government to direct more resources towards public investment and social services.
However, his statement is a claim by the Finance Minister, and the source material does not provide the underlying fiscal data or specify the period over which the current figure of less than 20% has been calculated.
Ghana seeks to prevent another debt crisis
Dr Forson said the government was also seeking to prevent Ghana from returning to what he described as an unsustainable debt position.
He said fiscal rules were being strengthened and would be given legal backing so that future governments would be required to respect them.
“We are ensuring the fiscal rules we have instituted are enshrined in law, so that no matter which government is in office, these rules will be respected,” he said.
The government has therefore linked the reduction in debt servicing not only to current fiscal management but also to efforts to impose longer-term limits on government borrowing and spending.
For ordinary Ghanaians, the significance of a lower debt-servicing burden would depend on whether the additional fiscal space translates into sustained improvements in public services and infrastructure.
The debt restructuring agreement with Belgium is part of Ghana's broader efforts to manage its debt obligations, although the supplied material does not give details of the value or specific terms of the agreement.