The Executive Director of the Institute of Public Policy and Accountability, Paul Twum-Barimah, has called for a deliberate effort to diversify Ghana’s export commodities to include shea nut, oil palm and other extractives.
He explained that enhancing exports through value addition and the inclusion of non-traditional commodities would help build adequate international reserves.
These reserves, he said, would serve as a buffer to mitigate the impact of global economic shocks and reduce the rate of exchange rate depreciation.
“This will not only boost exports but also widen the trade surplus of the country. Adequate international reserves will be built to limit or slow down exchange rate depreciation in times of global headwinds,” he stated.
Mr Twum-Barimah said this in a statement copied to the Daily Graphic following the first mid-year budget review presented to Parliament by the Minister of Finance, Dr Cassiel Ato Forson, last Thursday.
Dr Forson emphasised that the first half of 2025 had demonstrated government’s commitment to economic recovery.
He said through prudent fiscal management, sound monetary policy, effective structural reforms and strategic investments, government was laying a solid foundation for sustainable growth and shared prosperity.
He indicated that the declining inflation, improved fiscal performance and relative currency stability were evidence of a turnaround.
However, he acknowledged that while the macroeconomic environment had shown signs of improvement, vulnerabilities remained, particularly in the face of global uncertainties and Ghana’s still-elevated public debt levels.
As part of long-term plans to improve debt sustainability and rebuild investor confidence, he announced the establishment of two separate sinking fund accounts to help Ghana repay both domestic and external debts falling due between 2026 and 2028, without putting fresh pressure on the national budget.
“In August 2025, we will commence the building of cash buffers through a Cedi Sinking Fund and a US Dollar Sinking Fund. This structured approach will support the repayment of Ghana’s domestic and external debt obligations in a timely and predictable manner,” he said.
Cedi Sinking Fund
The Cedi Sinking Fund would be used to repay domestic bonds, especially those issued under the domestic debt exchange programme.
The government plans to redeem GH¢20 billion in 2026, GH¢50.3 billion in 2027 and GH¢45.75 billion in 2028.
He said the US Dollar Sinking Fund, on the other hand, will support the redemption of Eurobonds.
The projected payouts are $1.45 billion in 2026, $1.17 billion in 2027 and $1.14 billion in 2028.
Dr Ato Forson said the initiative was backed by Sections 37 to 44 of the Public Financial Management Act, 2016 (Act 921), which allowed for the creation of such funds to improve fiscal planning and reduce the risk of debt rollover.
“This approach will improve investor confidence and help prevent the sort of debt servicing challenges Ghana experienced in the past,” he stated.
Addressing external shocks
While welcoming the establishment of two separate sinking fund accounts, Mr Twum-Barimah expressed concerns about the country’s readiness for more extreme external shocks, should they occur.
He said that while the budget appeared promising, it did not outline adequate strategies to address external shocks.
He questioned whether the country had considered any turmoil more severe than the COVID-19 pandemic or the Russia-Ukraine war.
“It is welcoming to establish two separate sinking fund accounts to help Ghana repay both domestic and external debts falling due between 2026 and 2028, without putting fresh pressure on the national budget.
However, have we considered any turmoil more severe than COVID-19 or the Russian/Ukraine war?” he quizzed.