Presidential Advisor on Economy Warns of Debt Risks Despite GDP Growth Milestone
Presidential Advisor on the Economy, Seth Terkper, has highlighted concerns over the country’s debt sustainability despite recent GDP growth, cautioning that structural weaknesses in public finance could undermine economic progress.
Speaking at the launch of Deloitte’s 2025 Budget Analysis Report, Mr Terkper noted that while Ghana’s GDP has surpassed the GHS 1 trillion mark, much of this growth has been driven by fiscal corrections under the International Monetary Fund (IMF) programme. He underscored the need for Ghana to consolidate its fiscal position through a mix of homegrown policies and lessons drawn from past IMF programmes.
“We’ve been told in this budget that GDP has crossed a trillion cedis, which signifies some positive developments. However, this has largely been driven by corrections led by the IMF, which we attempted to break with homegrown policies,” he stated.
A key concern raised was Ghana’s persistent debt burden, which he linked to past and current fiscal mismanagement. Reflecting on the Heavily Indebted Poor Countries (HIPC) initiative, Mr Terkper described it as a pivotal moment for Ghana’s debt restructuring, but cautioned that the country has once again found itself in a precarious debt position.
“HIPC was a watershed moment in terms of debt forgiveness, but after a period of stability, we defaulted again. This highlights that debt remains a significant challenge. Unlike in the past, where foreign creditors bore the brunt of haircuts, domestic investors have now had to absorb losses. The question now is whether Ghana risks another default,” he warned.
Mr Terkper pointed to the country’s constrained access to both domestic and international financial markets as a major challenge, citing the inability to issue medium-to-long-term bonds. “We are locked out of our own domestic market and the external market. We can’t issue three-year or five-year bonds, which we previously introduced in 2010 and 2014. There was a time when domestic bonds were oversubscribed, with strong participation from foreign investors. That market has been eroded.”
Highlighting the impact on infrastructure financing, Terkper referenced Ghana’s Terminal 3 airport project as an example of smart borrowing, where revenues from airport taxes were earmarked to service debt. He called for a return to disciplined debt management practices, emphasizing the importance of refinancing mechanisms that prioritize sustainable repayment structures.
“The government must ensure that borrowing is tied to projects with clear revenue streams. Infrastructure development is essential for job creation and economic expansion, but if we borrow, we must have a structured plan to repay. Businesses and households manage their debts carefully—governments must do the same.”
Looking ahead, he stressed the need for Ghana to restore investor confidence, control inflation, and rebuild its domestic bond market. “The path forward will require tough decisions, but we must ensure that debt does not become a long-term drag on the economy. Without access to financing, growth will be stifled.”
His remarks come as the government seeks to implement its 2025 budget, with projected revenues of GHS 224.9 billion, up from GHS 186.6 billion in 2024. Analysts caution that while new revenue measures may help, Ghana’s ability to regain fiscal stability will depend on prudent debt management and sustainable economic policies.
