Former Finance Minister Dr Mohammed Amin Adam has challenged President John Dramani Mahama’s concerns over Ghana’s debt service obligations, urging him to mobilise funds as every government has done in the past to meet these commitments.

Presenting what they call the “True State of the Nation Address” on Monday, March 3, Dr Amin Adam dismissed the President’s warning about the country’s projected debt servicing obligations, arguing that debt management is a routine responsibility of any administration.

President Mahama recently raised alarm over Ghana’s debt servicing obligations for the next four years, estimating that the government would need GH₵280 billion—comprising GH1₵50 billion for domestic debt and GH₵130 billion for external debt.

According to Dr Amin Adam, however, such obligations are not unusual and should not be used to instill fear in the public.

“The President tried to scare the Ghanaian people about the country’s debt service obligations for the next four years. Government at every time, provides for debt servicing obligations, and the President is aware of this. We expect him to mobilise the funds as every government in Ghana has done to service our debts,” he stated.

According to him, the New Patriotic Party (NPP) also did the same when the National Democratic Congress left power with debts in 2017.”

He further highlighted that the NPP administration’s debt management strategies had led to a significant reduction in Ghana’s debt levels and debt servicing burdens. “Through negotiations, Ghana successfully rescheduled its $5.4 billion debt owed to official bilateral creditors until after 2026.”

“The Agreement we reached with the Official Creditors Committee for Ghana entails a rescheduling of all debt service (principal & interest) falling due between December 20, 2023, and December 31, 2026. As a result, no debt service under bilateral debt will be paid until after 2026, including the debt we didn’t pay in 2023 since we declared the debt standstill.”

Dr Amin Adam further outlined the terms of the rescheduling, noting that the deferred amounts would be repaid in two installments—16 and 17 years after their original due dates—with interest rates ranging between 1% and 3%.

He stressed that this agreement applies to all official bilateral creditors and ECA-backed facilities signed and disbursed before the end of 2022.

“This provides breathing space for the current government,” he emphasised, adding that the debt service relief from these negotiations amounts to $2.8 billion.This is money that the government of Ghana would have paid but which now stands as savings to the country,” he added.

Dr Amin Adam urged President Mahama to focus on effective economic management rather than stirring fear about debt obligations that governments must automatically address.

Source: Myjoyonline.com