#SONA2025: Our economy is in dire straits – President Mahama

President John Dramani Mahama has painted a grim picture of Ghana’s economic situation, describing it as being in "dire straits" and significantly worse than previously known. 

Addressing Parliament today in his first State of the Nation Address since assuming office, the President revealed staggering levels of debt, and economic instability inherited from the previous administration.

“It is common knowledge that our economy is in dire straits, which is putting it mildly. Because, after an initial assessment of the books, we have discovered that the economic problems are much deeper than was previously known. We have inherited a country that is broken on many fronts,” he stated.

According to President Mahama, the country’s public debt has ballooned to GH₵721 billion, with major state-owned enterprises like the Electricity Company of Ghana (ECG) and COCOBOD heavily indebted, owing GH₵68 billion and GH₵32.5 billion, respectively.

The President further revealed that COCOBOD was unable to supply 333,767 metric tons of cocoa that had already been sold at $2,600 per ton in the 2023/2024 crop season, leading to a massive revenue loss of $840 million. Additional losses of $495 million are expected as more cocoa is supplied under rolled-over contracts.

Energy and financial sector woes

The energy sector is also facing a serious financial shortfall of approximately GH₵34 billion for 2025 due to inefficiencies, legacy debts, and non-compliance with financial regulations. President Mahama lamented that despite the government’s previous spending of GH₵29.9 billion on a financial sector cleanup, the sector continues to struggle.

He further exposed the severity of Ghana’s debt servicing obligations, revealing that in the next four years, debt payments will amount to GH₵280 billion – GH₵150 billion for domestic debt and GH₵130 billion for external debt.

Rebuilding the economy

Despite the daunting challenges, President Mahama expressed his administration’s determination to restore fiscal discipline and economic stability. He announced measures to complete ongoing structural reforms, implement corrective fiscal policies, and build buffers in the sinking fund to support debt repayments.

“We are doubling our efforts to complete all outstanding structural reforms. Through the budget, we will implement corrective measures to restore fiscal discipline and debt sustainability,” he assured.

He also confirmed that Ghana remains committed to the IMF-supported programme, with the next review scheduled between April 2 and April 15, 2025, ahead of an expected IMF board approval in June.

Call for confidence

President Mahama urged citizens, businesses, and investors to trust his administration’s competence in steering the economy toward recovery. He highlighted government actions taken since January 7, 2025, including eliminating unnecessary expenditures and reducing reliance on borrowing, which have led to lower interest rates.

“With the transparent and prudent measures we have implemented since taking over the administration of this country, I urge my councilmen and women, business owners, and foreign investors to trust our competence in turning our economic fortunes around,” he stated.