Mahama: Ghana’s debt crisis a mirror of Africa’s governance failures

President John Dramani Mahama discussed Ghana’s debt situation at the African Union Debt Conference in Togo. He described it as part of a larger African issue. He emphasized the effects of unchecked borrowing and poor governance.

Mahama shared insights into Ghana’s debt history. In the early 2000s, Ghana made significant progress through HIPC and MDRI initiatives. These efforts reduced its debt-to-GDP ratio from over 100% to under 30%. This fiscal relief allowed for major investments in education, health, and infrastructure.

From 2006 to 2015, Mahama explained that Ghana balanced concessional and non-concessional loans. His administration entered an IMF-backed program in 2015 to restore fiscal discipline, especially in energy. However, excessive borrowing followed, worsened by COVID-19 and global inflation.

By 2022, Ghana's debt-to-GDP ratio reached 90.7%. By 2023, interest payments consumed 47% of government revenue. The World Bank called this figure unsustainable.

In 2024, Ghana secured a $5.4 billion debt restructuring deal through the G20 Common Framework. While this offers some relief, Mahama noted that recovery will be complex and require tough reforms.

He outlined three key lessons from Ghana’s debt crisis: timely engagement with creditors is essential; multilateral support must align with national priorities; governance is crucial for productive use of debt.

Mahama urged African leaders to take responsibility for their countries' debts. He warned that unsustainable borrowing for budget support has worsened the continent's challenges.