Ato Forson explains why gov’t won’t borrow to finance New Economy Programme

Finance Minister Dr Cassiel Ato Forson has ruled out additional borrowing to fund the government's proposed New Economy Programme, saying the initiative will be financed through domestic revenue mobilisation and savings generated from fiscal consolidation.

He said the government intends to allocate 1.5 per cent of Gross Domestic Product (GDP) annually to the programme between 2027 and 2030 without increasing the country's public debt.

Dr Ato Forson gave the assurance during an engagement with students and members of the university community at the Kwame Nkrumah University of Science and Technology (KNUST), where he addressed concerns about how the programme would be financed.

He identified 2 main sources of funding, explaining that 0.5 per cent of GDP would come from government revenue, while another 1 per cent would be made available through a reduction in the primary surplus target from 1.5 per cent to 0.5 per cent of GDP.

The arrangement, he said, would provide the government with the fiscal room to implement the programme, with total funding projected to reach at least US$13 billion over the 4-year period.

The Finance Minister also clarified that the Ghana Gold Board (GoldBod) does not contribute revenue directly to the Ministry of Finance or government coffers.

He explained that government revenue is mainly derived from direct taxes, indirect taxes and non-tax sources.

Dr Ato Forson further assured that the government remained committed to its debt sustainability objectives, including the plan to bring public debt down to 45 per cent of GDP by 2028.

To demonstrate progress towards that goal, he cited Ghana's primary balance performance, noting that the country recorded a primary surplus of 2.5 per cent of GDP in 2025, with a further surplus of 1.5 per cent expected in 2026.

According to him, the combined fiscal surpluses for the 2 years would contribute to a reduction in public debt equivalent to approximately 4 per cent of GDP.

However, beginning in 2027, the government plans to moderate the pace of debt reduction to 0.5 per cent of GDP annually to create additional fiscal space for investments under the New Economy Programme.

Dr Ato Forson maintained that the funding strategy would allow the government to pursue its economic transformation plans while ensuring that the country's debt remains on a downward trajectory.