BoG’s assurance on strong buffers to meet country’s debt obligations commendable

The assurance by the Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, that the country has built sufficient buffers to meet its debt obligations is a welcoming development and a strong signal of stability in the country’s eco­nomic management.

This is because over the past two to three years the country’s economy has suffered immeasur­ably from global economic shocks, coupled with rising unsustainable debt challenges, resulting in down­grades by international rating agencies.

This resulted in most of investors losing confidence in the Ghanaian economy and withdraw­ing their investment prematurely, putting pressure on the currency. Perhaps, the height of the coun­try’s economic malaise is reflected in both the Domestic and Exter­nal Debt Exchange Programmes embarked on by the government after signing a bailout programme with the International Monetary Fund (IMF).

The growing public debt and lack of servicing capacity meant the DEDEP was to offer the government and managers of the economy some reprieve in debt servicing, while creating allowance for restoration of the necessary macroeconomic framework to­wards stability and growth.

There is no gain saying that the uncertainties occasioned by the DEDEP did not only impact in­vestors but even on the domestic front, citizens had to be confront­ed with the harsh realities of the negative economic impact.

At the micro level, the ordinary citizen bore the brunt of the economic malaise as they were compelled to contend with the loss of value in purchasing power as well as high inflationary pres­sures, compounded by increase in food prices, transport, electricity, petroleum products and basic necessities of life.

It therefore comes as a relief the assurances by the Governor of the Bank of Ghana that the country has built enough buffers for the management of the economy.

Encouragingly, the country’s total public debt has been brought under control and currently stands at GH¢769.4 billion (55.0 per cent of Gross Domestic Prod­uct), compared with GH¢726.7 billion (61.8 per cent of GDP) at end-December 2024.

Addressing the press in Accra last Friday after the 124th regular meeting of the Monetary Policy Committee (MPC), Dr Asiama revealed that Ghana’s Gross Inter­national Reserves (GIR) currently stand at over $10.7 billion, repre­senting more than 4.7 months of import cover.

This level of reserves places the country in a relatively better posi­tion to meet its short to medium term external commitments.

At a time when Ghana prepares to begin to pay its debts to bilat­eral and multilateral and commer­cial partners in 2026 due to their suspension as a result of the IMF programme, the news of strong debt buffers come as timely reas­surance not just to policymakers, but also to investors, development partners, and citizens at large.

At a time when many econo­mies are grappling with high debt servicing costs and dwindling re­serves, Ghana’s ability to maintain this buffer speaks volumes about the careful stewardship of the BoG, led by Dr Asiama.

It is particularly important to note that Dr Asiama clarified that the country’s debt payments have not ceased and rather, the country is honouring its obligations in accordance with a structured schedule.

Ghana’s debt service ar­rangements, he said, have been well-programmed and are supported by a robust cash flow framework.

The Ghanaian Times commends the BoG for maintaining a strate­gic reserve policy, with a minimum threshold of three months’ import cover to provide a vital cush­ion against external shocks and strengthen the country’s credibility in international markets.

It is also commendable, the central bank has a comprehensive external payment planning to pay the country’s debt and beyond debt servicing, the BoG has also planned for other essential exter­nal payments, including commer­cial transactions.

We at The Ghanaian Times call for continued vigilance in macro­economic management and en­courage the BoG and the Ministry of Finance to stay aligned in their efforts to sustain this momentum.

We urge the BoG not to rest on its oars but strive to continue to build buffers to improve the external position of the country for strong economic growth and resilience.

The path to economic resilience is long, but with prudent man­agement and open engagement, the country can overcome its economic challenges.