Ghana’s Total Debt As At Now, And President Mahama’s Approach

The Bank of Ghana estimates that as of November 2024, Ghana’s total public debt was around GH¢736.9 billion.

This amount indicates a reduction in the debt load as it is lower than the GH¢807.8 billion recorded in October 2024.

As of November 2024, Ghana’s public debt was 72.2% of GDP, which is a decrease from 79.2% in October 2024.

After reaching a high of almost 100% in 2022, the International Monetary Fund (IMF) predicts that Ghana’s debt-to-GDP ratio will fall to less than 80% in 2025.

These changes show that Ghana’s debt management is on the rise, which will be important for John Mahama, the country’s 2025 president.

But it is extremely unlikely that any leader, including President John Mahama, will be able to pay off all of Ghana’s debts in a single term. There are several reasons, by the way.

Massive fiscal resources are needed to pay off such a large debt, but Ghana does not currently have them because of its economic challenges.

A large portion of Ghana’s annual revenue is already allocated to servicing its debts (paying interest and principal). For example, in 2024, Ghana was spending over 70% of its revenue on debt servicing, leaving little room for actual debt repayment.

Ghana would have to significantly expand its economy and raise tax, export, and investment revenue in order to pay off the debt. However, progress may be slowed by the current fiscal constraints, as economic growth takes time.

Ghana’s budget is currently funded by grants and loans from outside sources and is a participant in an International Monetary Fund (IMF) program. This would limit flexibility as any debt-clearing initiatives would also require external partners’ approval.

Structural changes that increase economic efficiency, decrease corruption, and improve public financial management would be necessary to pay off debt. It can be difficult to fully implement these reforms in a short period of time.

President Mahama can take action to lessen Ghana’s debt load by renegotiating repayment terms with creditors, as was recently done under the IMF program, even though it might not be possible to pay off all of the debts.

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To raise revenue, the nation would need to expand industries like technology, industry, and agriculture.

To increase efficiency, the president must also cut back on wasteful government expenditures. Encouragement of both domestic and foreign investment is necessary to boost economic growth.

In order to ensure that public funds are used efficiently and openly, corruption must also be addressed.

Reducing Ghana’s debt will require consistent work over a number of administrations. Instead of aiming for total debt elimination, Mahama’s job will be to put the nation on a path toward sustainable debt.