Ghana's government has begun to set aside funds for a GHS 54 billion repayment obligation under the Domestic Debt Exchange Programme (DDEP) due next year. This proactive measure aims to prevent a return to the debt challenges that led to the country's recent restructuring programme.
Dr. Cassiel Ato Forson, the Finance Minister, confirmed this during a working visit by the Vice President. He explained that early preparation is crucial, especially given the large amount due in 2025. Failure to meet such obligations could have severe economic consequences, as experienced in 2022.
This move is part of the broader effort to strengthen Ghana's fiscal credibility and ensure economic stability. Ghana faced significant economic difficulties recently, prompting a debt restructuring programme in 2022. The government is working to avoid an unsustainable fiscal path, which Dr. Forson likened to alcoholism, where initial positive effects lead to long-term hangovers.
Minister Forson stated that the government has already built sufficient financial buffers for two significant DDEP repayments this year. He confirmed a GHS 10 billion payment in February, with another GHS 10 billion scheduled for the first week of August. He expressed confidence in the government's ability to meet these immediate obligations.
Looking ahead, the Finance Minister highlighted a particularly large repayment of GHS 39 billion due on a single day in February next year. He stressed the importance of saving ahead of these 'bullets' to avert debt default. This strategic saving demonstrates the government's commitment to fiscal discipline.
The government's objective is to shift Ghana towards a path where economic growth and job creation are the primary drivers of development. Dr. Forson explained that restoring stability required two years of strong fiscal consolidation. Ghana has completed about 18 months of this adjustment programme.
The remaining six months will conclude the consolidation phase. After this period, the government plans to transition from 'shock therapy' to a 'new economy'. This new phase will prioritize growth and job creation, setting a fresh economic order for the country. This strategic shift follows recent announcements, including the early settlement of a $700 million Eurobond obligation.