Professor Zubairu has raised concerns over the funding arrangements for Ghana's proposed New Economy Programme. In response, Dr Cassiel Ato Forson, the Minister of Finance, addressed the concerns during an interactive engagement with students and members of the university community at the Kwame Nkrumah University of Science and Technology (KNUST). He assured that the programme would not be financed through additional borrowing.
Dr Ato Forson explained that the government plans to allocate 1.5 per cent of Gross Domestic Product (GDP) annually to the programme between 2027 and 2030. This allocation will come from two main sources: 0.5 per cent of GDP from government revenue and a reduction in the primary surplus target from 1.5 per cent to 0.5 per cent of GDP. This measure will create the necessary fiscal space for investment in the programme.
The total allocation for the New Economy Programme could potentially reach at least US$13 billion over the four-year period. Dr Ato Forson also clarified that the Ghana Gold Board (GoldBod) does not generate revenue for the Ministry of Finance or the government. Instead, the state's finances are primarily supported by direct taxes, indirect taxes, and non-tax revenue.
Dr Ato Forson reaffirmed the government's commitment to its debt sustainability targets, including reducing public debt to 45 per cent of GDP by 2028. He noted that Ghana recorded a primary surplus of 2.5 per cent of GDP in 2025 and projects a further surplus of 1.5 per cent for 2026. These surpluses will contribute to a debt reduction equivalent to approximately 4 per cent of GDP.
From 2027, the government intends to moderate the pace of debt reduction to 0.5 per cent of GDP annually. This adjustment will create additional fiscal space to support investments under the New Economy Programme. Dr Ato Forson maintained that the funding arrangement would enable the government to pursue its economic transformation agenda while keeping public debt on a declining trajectory.
The Minister's engagement with the university community was part of an effort to ensure transparency and build confidence in the government's economic plans. The New Economy Programme aims to drive economic growth and development in Ghana. The programme's success will depend on effective implementation and management of its funding.
The government's commitment to debt sustainability and fiscal consolidation is crucial for the programme's success. Dr Ato Forson's assurances have helped alleviate concerns over the programme's funding. The implementation of the New Economy Programme will be closely watched by stakeholders, including investors, businesses, and the general public.
Key points
- The programme will be funded through domestic revenue and savings from fiscal consolidation, without additional borrowing.
- The government plans to allocate 1.5 per cent of GDP annually to the programme between 2027 and 2030.
- The total allocation for the programme could potentially reach at least US$13 billion over the four-year period.
