Finance Minister Cassiel Ato Forson Reports Major Drop in Debt Servicing Costs as Ghana’s Banking Sector Reaches Full Capitalisation

Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has announced a landmark shift in the nation’s fiscal landscape, revealing that the proportion of national revenue dedicated to debt servicing has plummeted from over 50% to less than 20%. This significant reduction, highlighted by the Minister in late August 2026, signals a major improvement in the government’s fiscal sustainability and its capacity to fund essential public services. The news arrives alongside a declaration from the Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, confirming that all 23 commercial banks in the country are now fully capitalised, underscoring a broader trend of stabilisation within Ghana’s financial sector.

The drastic drop in debt-servicing costs is expected to create substantial fiscal space, allowing the administration of President John Mahama to redirect billions of cedis toward critical infrastructure and social priority programs. Dr. Ato Forson emphasised that by spending less than one-fifth of its revenue on interest and principal repayments, the government can now prioritise investments in education, healthcare, and school construction. This strategic pivot is central to the government’s broader fiscal plan, which aims to restore investor confidence and ensure that the country’s debt remains on a sustainable path following the economic reforms of recent years.

Investor confidence is already manifesting in the domestic debt market, as evidenced by a remarkable 162% oversubscription in the government’s latest treasury bill auction. Market participants showed a clear preference for the 364-day bill, which attracted GH9.9 billion in bids—representing 183% of the total bid volume—despite the government only accepting GH2.6 billion for that specific tenor. While interest rates on the yield curve have generally trended downward, the 364-day yield saw a marginal increase to 11.59%, while the 182-day and 91-day yields settled at 7.08% and 5.07%, respectively.

Complementing these fiscal milestones is the strengthened health of the banking industry. Dr. Johnson Pandit Asiama’s announcement that all 23 banks have met full capitalisation requirements indicates that the sector is now better positioned to absorb potential losses and support private-sector credit growth. By ensuring that financial institutions have the necessary capital buffers, the Bank of Ghana is fostering a more resilient environment for business expansion. Together, the reduction in sovereign debt pressure and the robust state of the banking sector provide a foundational platform for the Mahama administration's economic development agenda moving forward.