President John Dramani Mahama has shared insights from Ghana’s experience with debt restructuring at the African Union Conference on Debt in Lomé, Togo. He emphasized the importance of transparency and timely engagement with creditors to avoid severe economic consequences from reactive debt management decisions.
The President highlighted Ghana’s history of debt restructuring, citing the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI), which enabled Ghana to reduce its debt-to-GDP ratio from over 100% to under 30%. This freed up crucial fiscal space for investments in key sectors like education, roads, and healthcare.
President Mahama also expressed concern about the significant infrastructure gap facing Africa, which requires an estimated $130-170 billion in annual investment. He noted that 22 African countries are currently in or at high risk of debt distress, with the average public debt-to-GDP ratio in sub-Saharan Africa projected to exceed 60% in 2025.
The President detailed Ghana’s debt situation, which deteriorated due to unrestrained borrowing and external shocks, leading to a debt-to-GDP ratio increase from 56.3% in 2016 to a peak of 90.7% in 2022.
Sankofaonline
