Former National VAT Coordinator and Deputy Commissioner of the National Revenue Secretariat, Seth Terkper, has disclosed that Ghana is set to borrow approximately 57 billion cedis in 2025. He made this revelation while discussing the 2025 budget presented by Finance Minister Cassiel Ato Forson.
Ghana’s Economic Growth and Budget Realism
Speaking on the economic outlook, Seth Terkper emphasized that while the World Bank’s projections estimate Ghana’s economy to expand by 4.2% in 2025 and 4.8% in 2026, the government must align its budget with these projections while making necessary corrections.
He explained that the government is aware of the economic challenges and is taking steps to remove arrears owed to the private sector which will help make the private sector vibrant, Seth Terkper explained.
He acknowledged the growing impatience among Ghanaians regarding economic difficulties but stressed that structural corrections require time.
Timeframe for Economic Impact
When asked how long it would take for the average Ghanaian to feel the benefits of the budget measures, Seth Terkper stated that meaningful reforms typically take at least two years. He noted that some “low-hanging fruits” in tax collection efficiency could take effect within three to six months.
On whether the government plans to renegotiate with the IMF, Seth Terkper clarified that the administration aims to enhance the existing IMF program. He stressed the importance of using a broader fiscal balance rather than a primary balance to account for arrears, interest payments, and debt repayment.
Managing the Debt Burden
Addressing concerns about the country’s rising debt, Seth Terkper confirmed that Ghana had received about $2 billion of the $3 billion IMF support package
He explained that the government will rely on structured borrowing for major infrastructure projects, similar to past models used for Terminal 3 at Kotoka International Airport and the Atuabo gas infrastructure.
Borrowing Plans for 2025
On the borrowing outlook for 2025, Seth Terkper referred to the budget document, stating that revenue is projected at 224.9 billion cedis, while expenditure is estimated at 281 billion cedis, leaving a deficit of approximately 57 billion cedis.
He said the overall financing requirement is 56.9 billion cedis, meaning about 57 billion will be borrowed. He, however, emphasized that the government has made provisions for repayment.
He further highlighted that the financing will come from both foreign and domestic sources, with debt repayments structured over the coming years. The government anticipates a debt repayment of 9.126 billion cedis in 2025, rising to 43.7 billion in 2026, peaking at 58 billion in 2027, and decreasing to 47 billion in 2028.
Seth Terkper stressed that while Ghana remains constrained by debt obligations, the government’s approach is to implement revenue-enhancing reforms and ensure borrowing aligns with economic growth projections.
