Former Finance Minister Dr. Mohammed Amin Adam has called on the government to publish monthly reports on the Sinking Fund. This demand comes as Ghana prepares to repay GHS 111 billion in Domestic Debt Exchange Programme (DDEP) obligations in 2027 and 2028.
Dr. Adam's analysis indicates the Sinking Fund's balance stood at GHS 15.6 billion as of July 22, 2026. This figure is notably lower than the projected GHS 30 billion balance expected by the end of 2026. The government faces a GHS 58 billion DDEP principal repayment in 2027, followed by another GHS 53 billion in 2028.
Ghana's public debt management has been a critical issue, especially after its recent economic challenges and the implementation of the DDEP. The Sinking Fund is a mechanism designed to set aside money in advance for future debt repayments, aiming to reduce pressure on public finances. Effective management and transparent reporting of this fund are vital for maintaining investor confidence and ensuring fiscal stability. This strategy aligns with broader efforts to restore macroeconomic stability and reduce the debt-to-GDP ratio, which has been a concern for international financial institutions.
Dr. Amin Adam stated that pre-funding through the Sinking Fund is a prudent approach to debt management. He warned, however, that borrowing money to build up the fund could increase costs if investment returns are lower than the interest paid on those loans. He specifically noted, "Prefunding is prudent, but it means part of the 2026 increase in debt may be cash held for future redemptions rather than deficit financing."
The implications of the Sinking Fund's management are significant for Ghana's economic future. Regular, detailed reports would allow the public and financial markets to assess the fund's capacity to meet upcoming obligations. This transparency could also influence Ghana's credit ratings and its ability to access future financing. Decision-makers will need to ensure the fund is adequately resourced and its investments yield sufficient returns to avoid further fiscal strain. The government's response to Dr. Adam's call for monthly reports will be closely watched by investors and citizens alike.
Dr. Adam urged the government to disclose the fund's monthly inflows. These inflows include money from the allocation of 7% of non-oil tax revenue and proceeds from any bonds issued to support the fund. He also requested reports detailing how the money is invested and the returns generated. Furthermore, he called for information on the proportion of the fund financed through borrowing. Finally, he asked for clarity on the amounts expected to be withdrawn to meet future repayments. This comprehensive disclosure would provide a clear picture of the fund's health and operational efficiency.
The Sinking Fund's performance is crucial for Ghana's fiscal health. Its ability to accumulate sufficient resources directly impacts the government's capacity to meet its DDEP commitments without resorting to additional borrowing or fiscal tightening. The transparency measures proposed by Dr. Adam aim to build public trust and ensure accountability in the management of these critical national resources. This proactive approach to debt servicing is essential for Ghana's long-term economic resilience and its standing in global financial markets. The government's adherence to these transparency recommendations will be a key indicator of its commitment to sound financial governance.