In his first State of the Nation address after re-election, President Mahama highlighted alarming economic conditions, disclosing that the Sinking Fund holds only $64,000. He stressed the urgent need for action amid substantial debts and stalled infrastructure projects. Mahama emphasized the importance of collaboration in addressing the crises facing Ghana, announcing dialogues aimed at formulating solutions and restoring economic stability.
In his inaugural State of the Nation address on February 27, 2025, President John Mahama expressed deep concern regarding the health of the economy, citing significant hardship for the citizens. He revealed the Debt Service Reserve Account, or Sinking Fund, has a bare balance of $64,000 and GH¢143 million, countering claims of sufficient buffers for debt repayment, emphasizing the dire economic conditions.
Mahama decried the current energy sector’s financing obstacles, attributing issues to collection losses, non-compliance with financial mechanisms, and past debts. The anticipated funding gap for 2025 is projected at approximately $2.2 billion, necessitating urgent corrective measures. He also noted that the financial sector continues to face difficulties despite substantial past investment aimed at its stabilization.
Highlighting the impact of prior economic policies, particularly the Domestic Debt Exchange Programme, he stated that scant reserves for servicing debts remain compared to their previous administration’s pre-2017 efforts. Mahama warned that the repercussions of reckless debt accumulation would demand extensive efforts to correct. He outlined a staggering projection of GH¢280 billion in debt servicing over the next four years, with considerable implications for infrastructure projects.
Among stalled initiatives, he mentioned 55 projects halted, impacting an estimated cost of GH¢15 billion due to untapped funds. He announced plans for a National Economic Dialogue on March 3rd and 4th, alongside a forthcoming budget presentation by the Minister of Finance. Mahama affirmed his resolve not to dwell on blame but rather to actively seek solutions to the nation’s challenges, as he believes that is the mandate given to him by the citizens.
He drew a parallel with his prior administration’s successful resolution of power shortages, asserting that he aims to address the current economic crisis with the same determination. Mahama indicated that the previous administration’s mismanagement has left Ghana in a precarious position, referring to a staggering public debt of GH¢721 billion and extensive debts within key state-owned enterprises.
Specifically, he highlighted the significant indebtedness of Ghana Cocoa Board (COCOBOD) and Electricity Company of Ghana (ECG), with major financial implications for the agricultural sector and overall economic stability. Mahama reiterated his commitment to steering Ghana towards recovery and encouraged unity in overcoming the substantial challenges facing the nation.
Despite the troubling economic climate, he expressed optimism about collaborating with the people to redefine Ghana’s future. He acknowledged the serious ramifications of inherited debts and mismanagement while articulating his administration’s plan to reset the economy toward a trajectory of growth and prosperity.
President John Mahama’s State of the Nation address paints a stark picture of Ghana’s economic struggles, emphasizing dire financial realities and the challenges posed by significant debt. He underscored the need for collaborative efforts to address these issues, revealing plans for economic dialogue and a commitment to restore stability. Mahama remains dedicated to working alongside citizens in navigating the complexities of the nation’s recovery.
Original Source: www.ghanabusinessnews.com
