Finance Minister Dr Cassiel Ato Forson says Ghana has significantly reduced the proportion of its national revenue used to service public debt, with the country now spending less than 20% of its revenue on debt servicing.
According to the Finance Minister, the development represents a major improvement in Ghana’s fiscal position, compared to previous years when more than half of the country’s revenue was used to meet debt-servicing obligations.
Dr Ato Forson explained that the high debt-servicing burden previously placed considerable pressure on government finances and limited the resources available for critical sectors of the economy.
“In the past, Ghana spent over 50 percent of its national revenue on servicing debt. This left less money for schools, hospitals, roads and other essential infrastructure,” he said.
The Minister said the situation has now changed significantly, with the debt-service burden reduced to below 20% of government revenue.
“Today, I am proud to say that we have made significant progress. We now spend less than 20 percent of our revenue on servicing debt!” he added.
More fiscal space
Dr Ato Forson said the reduction in debt-servicing costs would provide government with greater fiscal space to direct resources towards priority areas of the economy.
He indicated that with a smaller proportion of revenue going towards debt obligations, government would have more room to invest in infrastructure, public services and other development programmes.
The Finance Minister’s comments form part of government’s broader efforts to demonstrate progress in restoring Ghana’s fiscal stability and improving debt sustainability.
Ghana has in recent years faced significant fiscal pressures, with a substantial portion of government revenue going towards servicing the country’s debt.
The situation has constrained public spending and contributed to efforts to restructure Ghana’s debt and implement measures aimed at restoring fiscal discipline.
Dr Ato Forson’s latest comments suggest that government believes these measures are beginning to yield results, particularly in reducing the amount of revenue committed to debt servicing.
The reduction is also expected to ease pressure on government finances and create room for increased spending on essential services and development priorities.
However, the sustainability of the improvement will depend on government’s ability to maintain fiscal discipline, strengthen domestic revenue mobilisation and keep borrowing within manageable levels.
