I hope Mahama’s government achieves 55% debt to GDP target – Akufo-Addo

President Nana Addo Dankwa Akufo-Addo has challenged the incoming Mahama administration to achieve the debt-to-GDP ratio of 55% by the end of its tenure.

According to the outgoing President, achieving this target would demonstrate Ghana’s commitment to fiscal responsibility and provide a solid foundation for economic growth.

Ghana is working to reduce its public debt to GDP ratio to 55% by 2028 amidst a raft of debt sustainability measures.

“The public debt-to-GDP ratio, therefore, has reduced from 79.2% in September 2024 to 74.6% in October 2024. This is expected to reduce further to 55% of GDP in net present value terms, a level that restores Ghana’s debt sustainability. It is hoped that the new government will continue with the policies being implemented to achieve this debt sustainability target.”

For President Akufo-Addo, while significant progress has been made in stabilizing the economy, the next government must prioritize reducing debt levels to secure long-term financial stability.

The debt to GDP-ratio target aligns with ongoing reforms under Ghana’s economic recovery programmes, including the current IMF arrangement, which singles out debt sustainability as a critical component of macroeconomic stability.

“The stock of public and publicly guaranteed debt increased during the economic difficulties. However, the government is servicing its debts, honouring coupon payments for both domestic bonds and Eurobonds. Moreover, the debt levels are reducing, recording a significant reduction in the debt stock by GH₵46.8 billion to GH₵761.01 billion in October 2024 from GH₵807.79 billion in September 2024”, Nana Addo said during his State of the Nation Address.

He also advised the incoming finance minister to ensure that the country never defaults on its debt repayments.

“I am happy to inform the House that today, 3rd January 2025, my government will honour coupon payments to our Eurobond holders amounting to $346 million. We cannot afford to default on our debt repayments. That’s the advice I want to give to the incoming finance minister.”