Ato Forson: Expensive Loans for Africa Worsen Debt Crisis
Finance Minister Dr. Cassiel Ato Forson has raised a serious alarm regarding African debt. He warned that elevated risk premiums on African debt are increasing borrowing costs for economies across the continent, including Ghana. According to him, African countries must secure loans at much higher rates compared to their global peers. This, therefore, undermines fiscal stability and worsens debt vulnerabilities. The unfortunate truth is that a significant amount of the loans are due to these expensive loans for Africa.
As a result, Africa’s total debt has now surpassed one trillion dollars. Furthermore, more than 20 sovereign nations had unsustainable debt by the end of 2024. Dr. Forson explained that this financing burden remains a major factor. It also contributes to the continent’s repeated surges in debt-to-GDP ratios. He believes the time has come to pay attention to debt service as a percentage of revenue. This is largely because, in his opinion, African countries are borrowing far too expensively. He questioned why the risk premium for African countries should be so different from that of Europe or America.
The Finance Minister made these remarks in Accra. He had just received a petition from the African Regional Organization of the International Trade Union Confederation (ITUC–Africa). The Trade Union Congress (TUC) Ghana collaborated with the group on this petition. Its goal is the total cancellation of Africa’s debt. At the same time, Dr. Forson urged African governments to show greater accountability.
Moreover, he wants them to demonstrate transparency in managing public debt. He cautioned that the use of debt is also very important. If governments use debt well, they should be able to pay it back. He further stressed, “We can’t forever be asking for debt forgiveness if we misuse the debt we accumulate.” This is a critical point. Therefore, it is important that groups like the TUC pressure governments to be transparent and use their debts properly. He believes that the trend of expensive loans for Africa will continue without such measures.
Source: Citinewsroom. Author: Emmanuel Oppong. Date: September 1, 2025.
