Minister of Finance, Dr. Cassiel Ato Forson, has revealed a staggering debt of GHS67.5 billion owed contractors and suppliers by the central government.
This amount represents 5.2% of Ghana’s GDP as of December 2024.
Dr. Forson disclosed this information while presenting the 2025 Budget Statement and Economic Policy in Parliament on March 11.
The road sector alone accounts for GHS21 billion of the total arrears.
Upon assuming office on January 23, 2025, Dr. Forson was inundated with payment requests from contractors and suppliers.
In response, the Ministry of Finance sought to establish the full extent of outstanding payments across all Ministries, Departments, and Agencies (MDAs).
The breakdown of the arrears reveals that GHS49.2 billion represents outstanding interim payment invoices from MDAs, while GHS18.3 billion is associated with bank transfers at the Controller and Accountant General’s Department.
Furthermore, Dr. Forson highlighted that the GHS67.5 billion debt does not include other significant financial obligations, such as:
– $1.73 billion owed to Independent Power Producers (IPPs)
– GHS68 billion in debts owed by the Electricity Company of Ghana (ECG) to contractors
– GHS32 billion owed by the COCOBOD to contractors
– GHS5.75 billion outstanding from the Ghana Road Fund to various contractors
– GHS53 billion requested by the Bank of Ghana (BoG) as a bailout to address its negative equity challenges
Ghana’s fiscal challenges are evident, and the need for measures to manage and settle these arrears is urgent.
The government’s debt management strategy will be crucial in addressing these challenges. As stated in the 2023-2026 Medium-Term Debt Management Strategy, Ghana’s debt management objectives include ensuring that financing needs are met on a timely basis and borrowing costs are minimized.
