Ghana’s Debt Burden ‘Cancerous’ – Finance Minister Warns of Potential 2027/2028 Crisis—–Ghana is facing a looming debt crisis in the coming years, with 2027 and 2028 set to bring the heaviest repayment burdens, Finance Minister Dr. Cassiel Ato Forson has warned.
Presenting the 2025 Budget Statement to Parliament, he described these upcoming debt obligations as “cancerous”, posing a significant risk to the economy if not addressed urgently.
According to Dr. Forson, Ghana’s debt service obligations over the next four years amount to GH¢150.3 billion, representing 11.6% of GDP. However, what makes the situation particularly dangerous is that 73.3% of this amount, GH¢57.6 billion in 2027 and GH¢52.5 billion in 2028, must be paid within just two years.
A Dangerous Debt Trap
The Finance Minister blamed the previous administration’s debt restructuring programme, which he said had shifted the repayment burden into 2027 and 2028, creating an economic time bomb. Instead of spreading out Ghana’s debt obligations in a more manageable way, the restructuring has left the country with “major debt humps” that could destabilize the economy.
“The debt service obligations of 2027 and 2028 are major humps. These humps are cancerous and pose significant risk to the economy but we shall fix it!” Dr. Forson declared.
Beyond the domestic debt crisis, Ghana also faces external debt service obligations totaling $8.7 billion over the next four years, amounting to 10.9% of GDP. Once again, the heaviest repayment burdens fall in 2027 ($2.5 billion) and 2028 ($2.4 billion), which together make up 55% of Ghana’s total external debt service.
A Lack of Financial Buffers
Compounding the problem, Ghana has no financial buffers to cushion these repayments. Dr. Forson revealed that as of January 7, 2025, Ghana’s Sinking Fund (debt service reserve account) held only $64,000, compared to $319 million in 2016. Similarly, the Cedi debt service reserve account held just GH¢143 million, down from GH¢430 million in 2016.
The lack of reserves means the government will either have to raise new revenue, cut spending, or restructure debt once again to avoid defaulting on these massive repayments. Without proactive measures, Ghana could face severe economic instability in just a few years.
Fixing the Debt Crisis
Despite the alarming outlook, Dr. Forson assured Parliament that the government is committed to finding a solution. He emphasized that Ghana must act now to avoid an economic disaster in the coming years. To manage the crisis, the government will implement a debt management strategy to spread out repayment obligations more evenly.
In addition to restructuring repayment schedules, the government is exploring alternative financing mechanisms to reduce reliance on excessive domestic and external borrowing. These measures include boosting foreign exchange reserves through initiatives such as the Ghana Gold Board (GoldBod), which will accumulate gold reserves to stabilize the economy and strengthen the cedi.
The Finance Minister stressed that Ghana cannot afford to wait until 2027 to take action. He warned that the longer the country delays in addressing the problem, the worse the situation will become. The time to fix the problem, he said, is now.
