The government is preparing to introduce a new Loans Act to tighten controls on public borrowing, as authorities move to consolidate debt restructuring gains and re-enter the domestic bond market under improved macroeconomic conditions.

Finance Minister Cassiel Ato Forson announced that the proposed legislation will enforce stricter rules on how the government contracts debt, requiring all borrowing to be tied to high-impact, value-for-money investments.

The policy direction follows the signing of the country’s 11th bilateral debt restructuring agreement with EXIM India and forms part of a broader reset of Ghana’s debt management framework.

The minister indicated that this law will define permissible uses of borrowed funds and eliminate non-essential borrowing, anchoring fiscal discipline in legal provisions. “Any debt incurred must yield tangible economic and social benefits,” he said, signalling a shift towards outcome-based borrowing decisions.

This move comes as the Ministry of Finance Ghana confirms the expiration of restrictions on new domestic bond issuance, a measure introduced in 2023 during the peak of Ghana’s debt crisis. The three-year restriction had prevented the government from issuing new bonds following a default that triggered the Domestic Debt Exchange Programme (DDEP).

Officials say the timing reflects improved macroeconomic conditions, including lower inflation, stronger investor confidence, and a more stable fiscal environment. The ministry stated that lifting the restriction allows the government to reduce its reliance on short-term Treasury bills and resume the issuance of longer-dated domestic bonds, which could help improve the maturity profile of public debt and ease refinancing risks.

Authorities also highlighted a strengthened track record in debt servicing since the restructuring. The government has met all coupon payments and obligations under restructured bonds since 2025, a development officials say has been critical in restoring credibility in the domestic debt market.

Last week, at its first investor town hall engagement since 2021, the finance minister reiterated that the economy is on a recovery path supported by disciplined fiscal management and improving macroeconomic fundamentals.

He pointed to successive reviews under the IMF-supported programme, with disbursements exceeding US$700 million alongside a sovereign credit rating upgrade to B- with a stable outlook.

Macroeconomic indicators have shown notable improvement. Inflation has declined to 3.3 per cent, while economic growth has strengthened, supported by expansion in the real sector. Fiscal consolidation has also resumed, with the government recording a primary surplus without cutting critical social and infrastructure spending.

On revenue, the minister said the fiscal framework is increasingly anchored on domestic mobilisation, with non-oil tax revenue accounting for more than 80 per cent of inflows. This shift is intended to reduce vulnerability to external shocks and strengthen fiscal resilience.

Debt management remains a central focus, particularly with upcoming maturities in 2027 and 2028. The government is implementing liability management strategies, including building buffers through the Sinking Fund and using portions of non-oil tax revenue to smooth the repayment profile and reduce interest costs.

The proposed Loans Act is expected to complement these measures by institutionalising borrowing discipline and reinforcing public financial management reforms. Officials say the framework will enhance accountability and improve the efficiency of public investment decisions, reducing the risk of a return to unsustainable debt accumulation.