Ghana’s government is grappling with financial challenges, leading to delays in payments across critical sectors such as health, education, and infrastructure. As economic pressures mount, concerns are growing over the sustainability of public services and the impact on businesses reliant on government contracts. Experts warn that urgent fiscal measures are needed to stabilize the economy and restore confidence in the country’s financial management
As 2024 came to an end, Ghana’s unpaid bills reached alarming levels, with the government owing billions of cedis across key sectors. The biggest victims in sectoral levels of these mounting debts are the infrastructure, economic, social, and administrative sectors, where ministries are grappling with large outstanding payments that threaten essential services.
Infrastructure Sector: The Heaviest Burden
Ghana’s infrastructure sector recorded the highest arrears, closing the year with GH¢22.9 billion in unpaid obligations. The Ministry of Roads and Highways bore the largest share, accounting for GH¢16 billion in outstanding payments. This means road contractors and ongoing projects may experience further delays, leaving many roads in poor condition.
The Ministry of Works, Housing and Water Resources owed GH¢1.6 billion, while the Ministry of Transport had GH¢1.98 billion in arrears.
Economic Sector: Energy and Agriculture Face Financial Squeeze
The economic sector followed closely with GH¢8.55 billion in outstanding payments, affecting industries crucial to Ghana’s growth. The Ministry of Energy recorded GH¢3.3 billion in arrears, raising fears of increased power outages and a struggling energy supply. With Ghana’s energy sector already under pressure, failure to clear these debts could disrupt fuel supply and power generation.
The Ministry of Food and Agriculture owed GH¢2.38 billion, making it difficult to fund farming programs, fertilizer distribution, and other agricultural support. This could have direct implications for food production and security. Additionally, the Ministry of Lands and Natural Resources, which plays a critical role in managing Ghana’s natural wealth, ended the year with GH¢1.89 billion in unpaid bills, potentially affecting land reforms and conservation efforts.
Social Sector: Education and Health at Risk
The social sector, covering education, healthcare, and social protection, was not spared from the arrears crisis. By the end of 2024, the Ministry of Education faced GH¢4.7 billion in unpaid obligations, raising concerns about funding for schools, teacher salaries, essential learning materials, and the feeding of school kids under social intervention programmes like the School Feeding Programme.
Healthcare also took a hit, with the Ministry of Health struggling with GH¢2.28 billion in arrears. If funds are not released, hospitals and clinics could face shortages of medicines and equipment, putting the health of Ghanaians at risk.
The Ministry of Gender, Children, and Social Protection, which oversees key social welfare programs, recorded GH¢752.9 million in outstanding payments, potentially affecting vulnerable populations who rely on government support.
Administrative Sector: Government Struggles with Its Own Bills
Even the government’s administrative sector found itself weighed down by massive debts. The Ministry of Finance owed GH¢2.89 billion, which could complicate budget execution and fiscal planning. The Ministry of Local Government, Chieftaincy, and Religious Affairs had GH¢1.43 billion in arrears, affecting local governance and municipal projects.
The country’s security services were not left out. The Ministry of Defence recorded GH¢4.72 billion in unpaid obligations, while the Ministry of the Interior, responsible for policing and emergency services, ended the year with GH¢1.78 billion in arrears. These financial constraints could impact national security operations and emergency response efforts.
Beyond Ministries: Ghana’s Bigger Debt Crisis
Outside these ministries, the government’s overall financial obligations remain high. By the end of 2024, Ghana owed US$1.73 billion to Independent Power Producers (IPPs), worsening the country’s energy sector woes. The Electricity Company of Ghana (ECG) had a mind-blowing GH¢68 billion in arrears, while COCOBOD, which supports the country’s cocoa farmers, owed GH¢32 billion, sparking fears about Ghana’s cocoa industry. The Road Fund, meant to finance road maintenance, also had GH¢5.75 billion in outstanding payments.
Government’s Commitment to Economic Reset
Nonetheless, the government has acknowledged these challenges and is committed to resetting the economy. Finance Minister Dr. Cassiel Ato Forson emphasized in the 2025 budget on Tuesday, March 11, 2025, the government’s plan to implement significant spending cuts and remove poorly designed taxes to improve the fiscal deficit and restore credibility.
The government is also restructuring its debt as part of the International Monetary Fund (IMF) conditions and conducting a comprehensive audit of arrears to address these financial challenges effectively.
Source: Accra Street Journal
Last Updated on March 19, 2025 by samboadu
