Government to Introduce New Loans Act to Strengthen Borrowing Discipline
Government is set to introduce a new Loans Act aimed at tightening oversight on the use of borrowed funds and ensuring that all future loans are channelled into high-impact, value-for-money investments, Finance Minister Dr. Cassiel Ato Forson has announced.
The proposed legislation, according to the Finance Minister, forms part of a broader fiscal reset strategy to reinforce discipline in public borrowing and safeguard Ghana’s debt sustainability following recent economic challenges.
“As part of this reset, the government will introduce a new Loans Act to strictly define the use of borrowed funds, ensuring that every loan is tied to high-impact, value-for-money investments,” Dr. Forson stated in a Facebook post on Monday, March 30.
He noted that government’s borrowing framework going forward will prioritise projects that deliver measurable and tangible benefits to citizens.
“Our guiding principle is simple: whatever we borrow must be worth it and must deliver tangible benefits to the Ghanaian people,” he said.
The announcement comes on the back of continued progress in Ghana’s debt restructuring programme, with the Finance Minister confirming the signing of the country’s 11th bilateral debt restructuring agreement with the Export-Import Bank of India.
“I recently signed Ghana’s 11th bilateral debt restructuring agreement, this time with EXIM India,” he noted.
Dr. Forson indicated that improving macroeconomic indicators suggest Ghana is gradually transitioning towards a lower risk of debt distress, signalling a potential turnaround in the country’s fiscal outlook.
“We are moving steadily towards a low risk of debt distress, with clear indicators that the worst is behind us,” he stated.
He further reaffirmed government’s commitment to honouring all restructured debt obligations while maintaining prudent fiscal management to avoid a relapse into unsustainable borrowing.
“Ghana will not return to a path of unsustainable borrowing,” he emphasised.
The proposed Loans Act is expected to strengthen accountability in public debt management by ensuring that all future borrowing decisions are aligned with projects that generate real economic returns, as authorities intensify efforts to restore macroeconomic stability and rebuild investor confidence.
