By Celestine Avi
President John Dramani Mahama has disclosed that the recent strengthening of the Ghana cedi has resulted in a significant reduction of the country’s public debt by more than GHS150 billion over the past five months.
Speaking at a high-level panel in Abidjan, President Mahama said the decline in the debt burden is due to a combination of debt restructuring and improved macroeconomic performance.
“Our debt continues to multiply because the cedi continues to grow weaker. Fortunately, some measures we put in place have recently begun to show results, and the cedi has been strengthening,” he said.
“We’ve reduced our total debt over the last five months by almost 150 billion cedis, which is very significant.”
He added that the government is on track to achieve its 2028 debt-to-GDP target of 55 to 58 percent well ahead of schedule.
President Mahama explained that Ghana’s default on its public debt triggered a painful but necessary debt exchange programme. The restructuring, he said, has now covered 97 percent of Ghana’s external debt, excluding a small portion held by commercial creditors.
“We’re engaged in a painful debt exchange program to restructure our debts and to bring debt-to-GDP to a range of about 55% to 58% by 2028,” he said.
“The debt restructuring was concluded early this year with our bilateral creditors… It brought the quantum of debt down and also stretched out the repayment.”
He emphasized the importance of smart borrowing, advocating for projects that pay for themselves, such as toll roads and strategic infrastructure.
“Any debt that we take must go into the most productive parts of our economy… For instance, expressways that are tolled, where the toll revenues are escrowed so that they go to pay the expressway in 25 years or so,” he stated.
“We built a first-class port… That port is paying for itself and that debt does not sit on our books.”
President Mahama also cited the construction of Terminal 3 at the Kotoka International Airport as another example of how his administration financed key infrastructure without adding to public debt.
“We built it on the balance sheet of the Ghana Airports Company Limited… That project is paying for itself without sitting on our public debt.”
The President attributed part of the public debt escalation in previous years to the depreciation of the local currency, which inflated Ghana’s debt when converted from foreign currencies.
“Our public debt is stated in cedis. The weaker the cedi becomes against foreign currencies, the higher it pushes up your debt,” he explained.
With current economic indicators pointing to a stronger cedi, President Mahama is optimistic that the country will meet its fiscal targets ahead of time.
“If that trajectory continues, the target of reaching 55% to 58% debt sustainability by 2028 will be reached by the end of this year,” he projected.
He concluded by underscoring the need to boost domestic revenue, eliminate waste, and uphold accountability.
“We need to look inward, boost domestic revenue, cut wasteful government expenditure, fight corruption, and introduce better accountability in governance. That is what the focus of my administration is.”
