In his address, President Mahama reported severe economic challenges facing Ghana, with only $64,000 in the Sinking Fund for debt service. He highlighted significant financing shortfalls in the energy sector, stalled infrastructure projects, and the staggering public debt. Mahama emphasized collaborative solutions to address the economic crisis and scheduled dialogues to engage the public.

In his first State of the Nation address on February 27, 2025, President John Mahama expressed grave concerns about the nation’s current state, noting significant economic distress. He revealed that the Sinking Fund, which is intended for debt repayment, only holds a balance of $64,000 and GH¢143 million, contradicting claims of adequate financial buffers for debt servicing. “Mr. Speaker, as I stated earlier, Article 67 of the 1992 Constitution requires that I give an account of the State of our Nation to Parliament. I am sad to report that the state of our nation is not good.” – John Mahama.

President Mahama highlighted serious financing issues in the energy sector, with a projected shortfall of approximately $2.2 billion or GH¢34 billion for 2025, necessitating urgent repair measures. He criticized the previous government’s approach, which left minimal reserves for debt servicing while embarking on a Domestic Debt Exchange Programme deemed severe. “They also left scant reserves for debt servicing despite implementing what may be considered the most severe and distressing economic policy in the annals of the Fourth Republic.” – John Mahama.

Notably, President Mahama discussed the adverse effects of high debt levels on infrastructure projects, revealing that 55 projects have stalled due to debt restructuring, resulting in potential cost overruns of about GH¢15 billion. He announced a National Economic Dialogue scheduled for March 3rd and 4th to inform the public about the economic crisis, alongside the presentation of the budget estimates on March 11th.

Maintaining an accountable leadership style, President Mahama rejected the tendency to lament or assign blame under challenging circumstances. Instead, he pledged to actively address the nation’s issues, referencing his previous success in resolving energy shortages, known as Dumsor. “Yes, I promised to fix it, and I did!” – John Mahama.

Reflecting on the severity of the inherited economic plight, President Mahama asserted the depth of the crisis exceeds initial public perceptions. He lamented the results of inadequate economic management that has led to an overwhelming public debt of GH¢721 billion and significant debts within state-owned enterprises, including ECG and COCOBOD. “Mr. Speaker, not even the restraints of an IMF programme were enough for the previous economic managers to exercise prudence in managing our finances.” – John Mahama.

The President revealed the detrimental impact on the cocoa sector due to previous management’s decisions, leading to financial losses for farmers. Although the cocoa sector can potentially face substantial revenue losses due to unmet contractual obligations, he remains optimistic about leading his government to rectify these economic challenges. “Notwithstanding this gloomy background, I remain committed to leading this government, taking every necessary step to reset our economy.” – John Mahama.

In summary, President John Mahama’s State of the Nation address underscores the severe economic challenges confronting Ghana, including inadequate debt servicing reserves, energy sector financing shortfalls, and stalled infrastructure projects. He reaffirmed his commitment to addressing these issues, emphasizing the need for a collaborative approach to restore the nation’s economic vitality. Immediate measures and transparent dialogue are essential to navigate the country’s financial crisis effectively.

Original Source: www.ghanabusinessnews.com