Government to enact new Loans Act to control borrowing
The proposed legislation, to be known as the Loans Act, was announced by Finance Minister Dr Cassiel Ato Forson shortly after Ghana completed its 11th bilateral debt restructuring agreement, this time with EXIM India.
A fresh legal framework to control public borrowing is now in the works, with the government signalling that future loans will face tighter scrutiny and must be tied to projects with clear economic returns.
The proposed legislation, to be known as the Loans Act, was announced by Finance Minister Dr Cassiel Ato Forson shortly after Ghana completed its 11th bilateral debt restructuring agreement, this time with EXIM India.
Rather than treating borrowing as a routine financing tool, the new policy direction suggests government wants to redefine it as a tightly regulated instrument reserved for priority investments only. Under the planned law, loans would no longer be used freely across a broad range of expenditure but would instead have to satisfy a stricter value-for-money threshold.
Officials say the idea is to draw a hard line against non-essential borrowing and create a system in which every debt decision can be justified by tangible gains to the economy and to the public.
The move is part of a wider attempt to reset the country’s approach to debt after years of fiscal strain and a difficult restructuring process. Government believes the economy is gradually moving into safer territory, helped by stronger macroeconomic signals and continued compliance with the terms of restructured obligations.
For the Finance Ministry, the next step is to make sure that the progress already made is not reversed.
Dr Forson’s position is that Ghana must move away from the old model in which debt could accumulate without sufficient attention to efficiency or long-term returns. The proposed act is expected to make borrowing decisions more disciplined by setting clearer legal boundaries around what loans can be used for.
In practical terms, the reform is meant to ensure that any future debt contributes directly to meaningful national outcomes, whether in productivity, infrastructure, social development or broader economic transformation.
The planned law is also expected to sit alongside wider reforms in public financial management, as the government tries to build a more controlled and accountable framework for spending, investment and fiscal planning.
