We won’t borrow to fund New Economy – Finance Minister

Finance Minister Dr Cassiel Ato Forson has ruled out additional borrowing to finance the government’s proposed New Economy Programme, saying the initiative will be supported through domestic revenue mobilisation and savings generated from fiscal consolidation.

He said government intends to dedicate 1.5 per cent of Gross Domestic Product (GDP) annually to the programme from 2027 to 2030 without increasing the country’s public debt.

Dr Ato Forson gave the assurance 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 over how the programme would be financed.

He identified two major funding sources: the allocation of 0.5 per cent of GDP from government revenue and a downward adjustment of the primary surplus target from 1.5 per cent to 0.5 per cent of GDP.

According to the Finance Minister, these measures will provide the necessary fiscal room to finance the programme, with the total investment expected to reach at least US$13 billion over the four-year period.

He also dismissed suggestions that the Ghana Gold Board (GoldBod) generates revenue for the Finance Ministry or government, explaining that the country’s revenue base largely comprises direct taxes, indirect taxes and non-tax revenue.

Dr Ato Forson further reiterated government’s commitment to its debt sustainability objectives, including the target of bringing public debt down to 45 per cent of GDP by 2028.

To demonstrate progress towards this goal, he pointed to the country’s improved primary balance, noting that Ghana achieved a primary surplus of 2.5 per cent of GDP in 2025, with another surplus of 1.5 per cent projected for 2026.

He said the two surpluses would together contribute to a debt reduction equivalent to about 4 per cent of GDP.

However, beginning in 2027, government plans to moderate the pace of debt reduction to 0.5 per cent of GDP each year to create room for investment in priority areas under the New Economy Programme.

Dr Ato Forson said the proposed financing approach would allow government to advance its economic transformation plans while maintaining a downward trajectory in public debt.