President Nana Addo Dankwa Akufo-Addo has urged the forthcoming Mahama administration to attain a debt-to-GDP ratio of 55% by the conclusion of its term.
The outgoing President emphasized that reaching this goal would reflect Ghana’s dedication to fiscal prudence and lay a robust groundwork for economic advancement.
Ghana is striving to lower its public debt-to-GDP ratio to 55% by 2028, supported by a series of debt sustainability initiatives.
“The public debt-to-GDP ratio has decreased from 79.2% in September 2024 to 74.6% in October 2024. It is anticipated that this will further decline to 55% of GDP in net present value terms, a threshold that would restore Ghana’s debt sustainability. It is hoped that the new administration will persist with the policies currently in place to meet this debt sustainability objective.”
According to President Akufo-Addo, while notable strides have been made in stabilizing the economy, the incoming government must focus on reducing debt levels to ensure long-term financial stability.
The target for the debt-to-GDP ratio is consistent with ongoing reforms under Ghana’s economic recovery programs, including the existing IMF arrangement, which identifies debt sustainability as a vital element of macroeconomic stability.
“The volume of public and publicly guaranteed debt rose during the economic challenges. Nevertheless, the government is managing its debts, fulfilling coupon payments for both domestic bonds and Eurobonds. Furthermore, debt levels are on a downward trajectory, with a significant reduction in the debt stock by GH₵46.8 billion, bringing it down to GH₵761.01 billion in October 2024 from GH₵807.79 billion in September 2024,” stated Nana Addo during his State of the Nation Address.
He also advised the incoming finance minister to ensure that the nation never defaults on its debt obligations.
I am pleased to announce to the House that on this day, January 3, 2025, my government will fulfill its obligation to make coupon payments to our Eurobond holders, totaling $346 million. It is imperative that we avoid any default on our debt repayments. This is the counsel I wish to extend to the incoming finance minister.
