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Finance Minister Dr Cassiel Ato Forson has clarified that Ghana’s recent reduction in its debt-to-GDP ratio was primarily driven by a 37% principal haircut imposed on Eurobond holders, rather than any financial policies implemented by the previous New Patriotic Party (NPP) administration.

He emphasised that the decline was a direct consequence of debt restructuring measures rather than improved fiscal management under the previous government.

As of the end of 2024, Ghana’s debt-to-GDP ratio stood at 65.7%, reflecting a significant drop compared to previous years.

Addressing the matter in an interview on Channel One TV on Wednesday, March 12, Dr Forson explained that the decrease was largely the result of adjustments made to the country’s debt obligations rather than any proactive policies introduced by the former administration.

“The debt-to-GDP has only come down not because of something that the NPP or the previous administration did. The debt-to-GDP has dropped because last year, the government gave bondholders, Eurobond holders, a 37% principal haircut,” Dr Forson stated.

He highlighted that this restructuring effectively reduced the overall debt burden by eliminating a substantial portion of the country’s obligations to international investors.

Providing further details, the Finance Minister illustrated the extent of the impact, stating, “So the Eurobond at the time, if it was GH¢10, GH¢3.7 billion was completely wiped out last year, and the interest that had accumulated over the period, another 37% was also wiped out.”

This, he noted, significantly altered Ghana’s debt profile, contributing to the lower debt-to-GDP ratio.