Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has vigorously defended the government’s borrowing approach, asserting that its focus on refinancing existing debt—rather than accumulating new liabilities—reflects a commitment to fiscal prudence.
In a detailed social media post, Dr. Forson revealed that the government received GHS 89.7 billion in bids for Treasury Bills (T-Bills) since January 2025, accepting GHS 59.5 billion to refinance maturing debts while rejecting GHS 30.2 billion in new borrowing requests. This strategy, he argued, has limited the net increase in public debt to GHS 7.1 billion, countering claims of unsustainable fiscal practices.
Central to his argument is a notable decline in the 91-day T-Bill rate, which dropped from 28.34% to 20.79% within 50 days of the current administration taking office. Dr. Forson linked this shift to renewed investor confidence in Ghana’s economic direction, citing stabilized inflation and a clearer macroeconomic outlook as key drivers. “Lower borrowing costs signal growing trust in our policies,” he stated, framing the trend as evidence that strategic debt management can alleviate fiscal pressures without stifling growth.
The Finance Minister’s remarks come amid heightened scrutiny of Ghana’s debt dynamics, particularly as global financial conditions tighten. By prioritizing refinancing, the government aims to reduce debt servicing costs, free up resources for critical investments, and curb inflationary risks. Dr. Forson emphasized that this approach aligns with broader goals to create a predictable environment for businesses and investors, though he acknowledged lingering concerns about Ghana’s overall debt sustainability.
Critics, however, question whether the strategy addresses deeper structural challenges. While refinancing eases immediate liquidity strains, Ghana’s debt-to-GDP ratio remains elevated, and external shocks—from fluctuating commodity prices to volatile currency markets—could undermine progress. The government’s ability to sustain this disciplined path hinges on balancing austerity with initiatives to spur productivity, particularly in sectors like agriculture and manufacturing, which are vital for long-term resilience.
Dr. Forson’s optimism also faces practical tests. The rejected GHS 30.2 billion in T-Bill bids underscores a cautious approach to new debt, but Ghana’s infrastructure gaps and social spending needs persist. Meanwhile, the drop in T-Bill rates, while encouraging, must translate into tangible benefits for households and businesses grappling with high living costs and limited access to credit.
As the Mahama administration navigates these complexities, the broader question remains: Can Ghana sustain its refinancing-focused strategy while fostering inclusive economic growth? The answer may depend on complementary reforms—from improving tax collection to enhancing public sector efficiency—that reduce reliance on borrowing altogether. For now, the government’s measured approach offers a reprieve, but the road to lasting fiscal health demands more than deft debt management. It requires a blueprint for self-sufficiency in an uncertain global economy.
