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Mahama shares Ghana’s debt restructuring lessons at AU conference
President John Dramani Mahama addressed fellow African leaders at the African Union Conference on Debt in Lomé, Togo, on Monday, sharing insights from Ghana’s experience with debt restructuring.
He emphasised the importance of transparency and timely engagement with creditors to avoid severe economic consequences from reactive debt management decisions.
The president highlighted the significant infrastructure gap facing Africa, which requires an estimated $130-170 billion in annual investment. He noted that the lack of access to affordable, long-term financing options often leaves nations with unsustainable debt burdens.
Citing IMF data, the President expressed concern that 22 African countries are currently in or at high risk of debt distress. He pointed out that the average public debt-to-GDP ratio in sub-Saharan Africa is projected to exceed 60% in 2025, a significant increase from 40% a decade ago.
Drawing from Ghana’s history, President Mahama referenced the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI), which enabled Ghana to reduce its debt-to-GDP ratio from over 100% to under 30%. This, he explained, freed up crucial fiscal space for investments in key sectors like education, roads, and healthcare.
“Ghana, like many of our peers, has had to undergo painful restructuring to restore macroeconomic stability and rebuild investor confidence,” President Mahama stated.
He highlighted Ghana’s strategic use of concessional and non-concessional financing between the early 2000s and 2015 to accelerate infrastructure development and social inclusion.
The President detailed how, after initial progress, Ghana’s debt situation deteriorated due to a combination of unrestrained borrowing and multiple external shocks, leading to a debt-to-GDP ratio increase from 56.3% in 2016 to a peak of 90.7% in 2022.
He noted that by 2023, interest payments alone consumed 47% of total government revenue, a level deemed fiscally unsustainable by the World Bank.
The Chairperson of the Public Accounts Committee (PAC) Abena Osei Asare has expressed concerns about the failure of the Administrator of the Ghana Education Trust Fund (GETFund) Mr. Paul Adjei to honour invitation of the Committee to assist in dealing with abandoned projects cited in the 2024 Auditor-General’s report.
She emphasised that some of the projects have been abandoned for more than 20 years and it kept reoccurring in the Auditor-General’s report yearly, stressing that the GETFund Administrator could assist by prioritising these projects.
However, he has failed to personally appear before the Committee since the commencement of the Committee’s public hearing in the 9th Parliament.
According to the 2024 Auditor-General’s report on Pre-University Educational Institutions, nine (9) Institutions with 16 projects awarded by the GET Fund Secretariat had been abandoned/delayed for a period ranging between three (3) and 28 years.
Some of the affected schools include Adanwomoase Senior High School (Boys and Girls dormitory abandoned for 12 years), Atoa Senior High School (Home Economics Block abandoned for 27 years), Beposo Senior High School (Dinning Hall and Kitchen Complex abandoned for 10 years and lastly KNUST Senior High School (Three storey classroom block abandoned for 20 years).
The Parliamentary Select Committee on Energy continued its oversight responsibilities with a working visit to the National Petroleum Authority (NPA) yesterday.
Chairman of the Committee, Emmanuel Kwasi Bedzrah, said the visit formed part of efforts to familiarize members with the Authority’s operations and to explore ways Parliament could provide the necessary support.
He explained that the NPA’s work is focused on regulating Ghana’s downstream petroleum sector, a critical area for national energy security.
Mr. Bedzrah noted that the Committee is particularly interested in assessing whether the country has adequate petroleum stock to meet demand.
He noted that rising geopolitical tensions, including the ongoing US–Iran conflict, could have adverse effect on Ghana’s energy supply and pricing.
He further disclosed that the Committee intends to engage closely with the Authority on a proposed new petroleum bill.
According to him, a draft of the legislation will be reviewed and possibly presented to Parliament under a certificate of urgency.
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