Reserves Build-up: Previous Gov’t Borrowed $21.7bn at $3.84bn Interest Cost, Says Dr Cassiel Ato Forson
Finance Minister Dr Cassiel Ato Forson has revealed that Ghana borrowed a total of US$21.7 billion between 2017 and 2024 to support foreign reserve accumulation, incurring an interest cost of US$3.84 billion over the period.
Defending the Ghana Accelerated National Reserve Accumulation Policy (GANRAP) in Parliament on Wednesday, February 25, Dr Forson argued that the country’s previous approach of building reserves through borrowing and short-term financial instruments imposed an unsustainable fiscal burden.
According to him, between 2018 and 2021, government raised approximately US$11.025 billion from the Eurobond market at interest rates ranging between 7.6 per cent and 9.6 per cent per annum to bolster reserves.
“These Eurobond issuances alone cost Ghana about US$2.5 billion in interest payments from 2018 to 2022,” he told the House.
Dr Forson further disclosed that Ghana continues to service these obligations following the 2022 debt default, with US$1.5 billion due to Eurobond holders in 2026 alone.
He explained that over the past eight years, the Bank of Ghana relied heavily on swaps, sale and buy-back arrangements (SBBs) and other short-term facilities to shore up the country’s external buffers.
In 2022, 2023 and 2024, the central bank accumulated reserves of about US$3 billion, US$2 billion and US$650 million respectively through swaps and SBBs, at interest costs of US$615 million, US$476 million and US$67 million.
“In those three years alone, from 2022 to 2024, the Bank of Ghana accumulated US$5.65 billion from swaps and sale and buy-backs at a cost of US$1.16 billion in interest payments only,” Dr Forson stated.
He added that between 2018 and 2021, the central bank also borrowed US$2 billion from international commercial banks, including JPMorgan Chase, Standard Chartered and Citibank, at a cost of US$182 million.
Despite these substantial borrowings between 2017 and 2022, Dr Forson argued that the measures failed to stabilise the cedi, resulting in significant depreciation and depletion of reserves.
“It is obvious that borrowing to support reserves accumulation is unsustainable and leads to high debt distress and debt overhang,” he stressed.
In contrast, the Finance Minister highlighted what he described as a more cost-effective model under GANRAP, anchored on the operations of the Ghana Gold Board.
He disclosed that the Gold Board brought in about US$10 billion in foreign exchange in 2025 at a cost of US$214 million to support reserve accumulation.
Dr Forson argued that if government had borrowed the same US$10 billion at a yield of 8 per cent in 2025, Ghana would have paid approximately US$800 million in interest in just one year.
He concluded that the cost of accumulating reserves through the Ghana Gold Board in 2025 was significantly lower than the interest expenses incurred under the Bank of Ghana’s swaps and SBB arrangements in 2022 and 2023.
Describing GANRAP as a strategic shift, the Minister maintained that the policy offers a more sustainable pathway for strengthening Ghana’s external buffers while reducing exposure to high-cost debt.
