By ELVIS DARKO, Accra
Ghana’s Domestic Debt Exchange Programme (DDEP) has led to significant domestic debt service payments.
Over the next four years, the country is projected to pay approximately GH₵150.3 billion, representing 11.6% of Gross Domestic Product (GDP) in domestic debt service obligations.
A substantial portion of this debt, 73.3%, is due in 2027 (GH₵57.6 billion) and 2028 (GH₵52.5 billion).

2027 and 2028: The “hump years”
The debt service obligations for 2027 and 2028 are particularly concerning.
These financial burdens, described as “major humps,” pose a serious threat to Ghana’s economic stability.
However, authorities have assured the public that measures will be taken to address these challenges.
In the current financial year, debt servicing remains a pressing issue.
Key repayment obligations include significant payments in February (GH₵9.9 billion), July (GH₵6.2 billion), and August (GH₵10.1 billion), adding further pressure on government resources.

Fiscal pressure

The fiscal challenges are exacerbated by a substantial volume of short-term treasury bill maturities inherited from previous administrations.
These obligations, totaling around GH₵111.1 billion, require weekly rollovers, placing additional strain on cash flow and liquidity management.

External debt servicing: US$8.7bn in 4 years
Beyond domestic debt, Ghana faces significant external debt service obligations over the next four years, amounting to US$8.7 billion.
This represents 10.9% of GDP, with the most substantial repayments concentrated in 2027 and 2028.
Specifically, 55% of the total external debt service—US$2.5 billion in 2027 and US$2.4 billion in 2028—falls within these two years.

Limited reserves to meet debt obligations
As of January 7, 2025, Ghana’s debt service reserve accounts held minimal funds.
The debt service reserve dollar account (Sinking Fund) had a balance of only US$64,000, while the Cedi reserve account contained GH₵143 million.
These figures highlight the urgent need for effective debt management strategies to prevent further economic strain.

A call for strategic financial management
With mounting debt service obligations and liquidity constraints, Ghana must adopt strategic measures to navigate these financial challenges.
Addressing the “hump years” of 2027 and 2028 will require innovative fiscal policies, debt restructuring efforts, and improved revenue generation strategies to ensure economic stability and sustainable growth.

GH¢189bn spent on debt servicing in 12yrs
Ghana’s debt servicing between 2010 and 2022 amounted to GH¢189 billion, covering a 12-year period.
The annual breakdown highlights a steady rise in debt obligations: in 2010, GH¢1.44 billion was spent, increasing to GH¢45.69 billion by 2022.
The progression includes GH¢1.61 billion in 2011, GH¢2.44 billion in 2012, GH¢4.4 billion in 2013, GH¢7.08 billion in 2014, GH¢9.08 billion in 2015, and GH¢10.77 billion in 2016.
From 2017 onward, debt servicing climbed further, with GH¢13.57 billion in 2017, GH¢15.82 billion in 2018, GH¢19.77 billion in 2019, GH¢24.60 billion in 2020, and GH¢33.52 billion in 2021 before reaching GH¢45.69 billion in 2022.