Dr. Mohammed Amin Adam proposes 13 debt management reforms

Former Finance Minister Dr. Mohammed Amin Adam has proposed 13 strategic measures aimed at enhancing transparency and market confidence in Ghana's public debt management. His recommendations emphasize a transition from emergency financing to a more stable domestic debt market, driven by competitive auctions and mandatory monthly disclosures. Dr. Amin Adam expressed concern that the country's reliance on Treasury bills and non-competitive borrowing could obscure the true cost of public debt and undermine the long-term recovery of the financial sector.

A central pillar of his analysis is the growing "sovereign-bank nexus," where domestic banks have become increasingly exposed to government debt. According to Dr. Amin Adam, central government domestic debt rose to GH‵190.1 billion by July 2026, with banks holding 31.9% of that total, up from 26.5% at the start of that year. He warned that this trend risks crowding out private sector credit and leaves bank balance sheets vulnerable to sovereign risks. To mitigate this, he called for more transparent debt issuance and competitive pricing to protect the banking system.

The former minister also highlighted significant refinancing risks associated with the Domestic Debt Exchange Programme (DDEP). Ghana faces total principal repayments of GH‵111 billion across 2027 and 2028. While the national Sinking Fund is intended to cushion these payments, it currently holds only GH‵15.6 billion against a projected target of GH‵30 billion. Dr. Amin Adam urged the government to provide monthly disclosures of Sinking Fund inflows and investments to build public confidence and ensure the country is adequately prepared for the upcoming repayment cycle.

Finally, Dr. Amin Adam cautioned that external factors, particularly cedi depreciation, could erode recent debt relief gains. While the appreciation of the cedi in 2025 reduced the local value of external debt by GH‵125.3 billion, a 6% weakening of the currency between January and July 2026 caused the cedi-denominated debt to rise by GH‵14.8 billion. To stabilize the fiscal landscape, he recommended mandatory disclosure of all non-competitive borrowing transactions and independent assessments of value-for-money to ensure borrowing rates accurately reflect market conditions.