President John Mahama has indicated he is sad to report that the state of the nation is not good and Ghana’s economy is in crisis.
To paint a clearer picture, President Mahama assured Ghanaians that government will host a National Economic Dialogue on March 3rd and 4th. Subsequently, on March 11th the Minister for Finance will present budget estimates for the financial year to parliament. These two events will allow us to present the real level of Ghana’s economic crisis to the people.
“It is common knowledge that our economy is in dire straits, which is putting it mildly because, after an initial assessment of the books we have discovered that our economic problems are much deeper than was publicly known. We have inherited a country that is broken on many fronts. The profundity of the challenges is staggering.”
Additionally, the energy sector faces significant financing challenges – primarily due to collection and system losses, non-compliance with the Cash Waterfall Mechanism and legacy debts.
Ghana’s catastrophic debt position has also severely impacted infrastructure projects that should have been completed. “There are fifty-five (55) stalled projects due to the default of debt and subsequent restructuring, with a total amount of US$2.95billion not disbursed. The stalling of these projects is expected to result in a cost overrun of about GH¢15billion.”
In spite of the gloomy picture painted, the President reaffirmed his administration’s commitment to working with international partners, including the IMF, to restructure Ghana’s debt while building domestic capacity for long-term economic sustainability.
Delivering his first State of the Nation Address in his second term, President Mahama emphasised that it is not his style to lament or shift blame in the face of adversity. His approach is to accept challenges and work hard to resolve them.
According to the president, Ghana’s debt servicing over the next four years will total GH¢280billion – comprising GH¢150billion for domestic debt and GH¢130billion for external debt servicing.
“We are saddled with staggering debts and glaring signs of almost deliberate an – in some cases – reckless mismanagement of our resources,” Mahama stated.
