Ghana’s debt became shackle on our economic progress, dragging our nation into hardship and despair — Mahama

President John Dramani Mahama has described December 19, 2022, as one of the bleakest moments in Ghana’s economic history, reminding the nation that it was on that day the country formally declared it could no longer meet its debt obligations.

Addressing Parliament during the State of the Nation Address on February 27, the President recounted how Ghana announced a debt default and imposed a moratorium on both domestic and external debt repayments, a move that triggered a demanding and intricate restructuring process.

He said the weight of the country’s debt had become a heavy constraint on national development, deepening economic hardship and uncertainty.

“Ghana’s debt became a shackle on our economic progress, dragging our nation into hardship and despair,” he said.

According to President Mahama, a thorough review of Ghana’s debt profile revealed that earlier arrangements had merely deferred the pressure, with the most burdensome repayments scheduled between 2025 and 2028. He stressed, however, that his administration chose bold intervention over empty assurances.

The government, he explained, established sinking funds, renegotiated obligations and secured bilateral agreements aimed at restoring stability and credibility to the economy.

These measures, he disclosed, resulted in a reduction of public debt by GHS82.1 billion, lowering the debt to GDP ratio from 61.8 per cent to 45.3 per cent, one of the steepest declines recorded in the country’s history.

The President further revealed that on January 2, Ghana made an early settlement of a US$709 million Eurobond, completing a total of US$1.4 billion in debt service that had originally been scheduled for 2025.

He added that Ghana’s renewed fiscal discipline has drawn international recognition, with major global credit rating agencies, including Fitch Ratings, Moody's and Standard & Poor's, upgrading the country’s credit ratings in what he described as the first triple upgrade in many years.