President John Dramani Mahama has described Ghana’s debt situation as a reflection of the broader African experience, highlighting the consequences of unchecked borrowing and poor governance.
Speaking at the African Union Debt Conference in Togo on Monday May 12, Mahama shared insights into Ghana’s debt history and the hard lessons it offers for the continent.
He noted that in the early 2000s, Ghana made significant progress through the HIPC and MDRI initiatives, reducing its debt-to-GDP ratio from over 100% to under 30%.
This fiscal relief enabled major investments in key sectors such as education, health, and infrastructure.
Between 2006 and 2015, Mahama explained, Ghana’s governments, including his own, balanced concessional and non-concessional loans to drive development.
In 2015, his administration entered an IMF-backed programme to restore fiscal discipline, particularly in the energy sector.
However, Mahama acknowledged that in the years that followed, excessive borrowing, coupled with external shocks like COVID-19, global inflation, and fluctuating commodity prices, pushed the debt-to-GDP ratio to 90.7% by 2022. By 2023, interest payments accounted for 47% of government revenue—a figure the World Bank deemed unsustainable.
In 2024, Ghana secured a $5.4 billion debt restructuring deal through the G20 Common Framework. While the deal offers some relief, Mahama stressed that the road to recovery remains complex and requires hard reforms.
He outlined three major lessons from Ghana’s debt crisis: the importance of timely and transparent engagement with creditors; the need for multilateral support aligned with national priorities; and the critical role of governance in ensuring debt is used productively.
Mahama called on African leaders to take responsibility, warning that unsustainable borrowing—particularly for budget support in weak governance environments—has contributed to the continent’s current debt challenges.
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