"No more non-essential debt" – Finance Minister Dr. Ato Forson announces strict new Loans Act

The Government of Ghana is preparing to introduce a new Loans Act aimed at tightening controls on public borrowing and ensuring that all contracted debt delivers measurable value to the economy.

Finance Minister Cassiel Ato Forson announced the policy direction after Ghana signed its 11th bilateral debt restructuring agreement with EXIM Bank of India, describing the move as part of a broader reset of the country’s debt management strategy.

Strengthening Borrowing Controls

According to the Minister, the proposed legislation will clearly define how borrowed funds can be used, ensuring that every loan is tied to high-impact, value-for-money investments. The objective is to eliminate non-essential borrowing and enforce stricter fiscal discipline across government financing decisions.

He stressed that the new law will mark a major shift in how Ghana approaches debt, placing emphasis on accountability, efficiency, and long-term economic returns.

Supporting Debt Sustainability

The initiative forms part of ongoing efforts to consolidate gains from Ghana’s debt restructuring programme. Authorities say the country is gradually moving toward a lower risk of debt distress, supported by improving macroeconomic indicators and consistent compliance with restructured debt obligations.

Cassiel Ato Forson emphasised that the new legal framework will help prevent a return to unsustainable borrowing patterns that previously strained the economy.

Focus on Value-for-Money Investments

Under the proposed Loans Act, future borrowing will be guided by a clear principle: any debt incurred must generate tangible economic and social benefits for citizens. This includes prioritising investments in infrastructure, social services, and productive sectors that contribute to growth and development.

The legislation is also expected to strengthen oversight mechanisms, ensuring that public funds are used efficiently and transparently.

Broader Fiscal Reforms

The Loans Act will complement wider public financial management reforms aimed at enhancing accountability, improving investment outcomes, and safeguarding Ghana’s fiscal stability.

Analysts view the move as a critical step toward restoring investor confidence, strengthening the domestic economy, and ensuring that future borrowing supports sustainable development goals.