Ato Forson explains why gov’t won’t borrow to finance New Economy Programme

Finance Minister Dr Cassiel Ato Forson has explained that the government will not contract additional loans to finance its proposed New Economy Programme, insisting that the initiative will be funded through domestic revenue mobilisation and savings from fiscal consolidation.

He said the government intends to allocate 1.5 per cent of Ghana’s Gross Domestic Product (GDP) annually to the programme between 2027 and 2030, with total funding expected to reach at least US$13 billion over the four-year period.

Dr Ato Forson made the disclosure during an engagement with students and members of the university community at the Kwame Nkrumah University of Science and Technology (KNUST), where he addressed concerns about how the ambitious programme would be financed without increasing the country’s debt burden.

According to the Finance Minister, the funding arrangement will rely on two major sources. The first involves allocating 0.5 per cent of GDP from government revenue, while the remaining 1 per cent will come from reducing the primary surplus target from 1.5 per cent to 0.5 per cent of GDP.

He explained that the approach would create sufficient fiscal space for investment while allowing Ghana to maintain its commitment to debt sustainability.

Dr Forson reiterated the government’s intention to reduce public debt to 45 per cent of GDP by 2028.

He disclosed that Ghana recorded a primary surplus of 2.5 per cent of GDP in 2025, with another 1.5 per cent projected for 2026. These surpluses are expected to contribute to reducing public debt by approximately four percentage points of GDP.

From 2027, however, government plans to moderate annual debt reduction to 0.5 per cent of GDP to accommodate investments under the programme.

He maintained that the strategy would support economic transformation without relying on additional borrowing or abandoning fiscal discipline.

PENYAH_BLOG_MEDIA feedback-opera-news-app@opera.com