MAHAMA GOVT TO REPAY OVER GHS 150BN IN (DDEP) IN 4 YEARS
Ghana's Finance Minister, Dr. Cassiel Ato Forson, has revealed the daunting task of managing the country's domestic debt. In a recent interview, Dr. Forson disclosed that the Mahama government has inherited a staggering GHS150.3 billion in domestic debt from the previous administration. This massive debt burden is set to weigh heavily on the government's finances over the next four years.
The sheer scale of Ghana's domestic debt is a cause for concern. With GHS57.6 billion due for repayment in 2027 and GHS52.5 billion in 2028, the government faces significant challenges in meeting its debt obligations. This has serious implications for the country's economic stability and growth prospects.
Dr. Forson emphasized the need for financial intervention in the energy sector, which is facing an annual shortfall of over $2 billion. To address this, the government has allocated GHS28 billion to support the energy sector in the 2025 budget. This move is aimed at stabilizing the sector and ensuring a reliable supply of energy to power Ghana's economic growth.
However, the government's efforts to manage the debt burden and support key sectors like energy are being hampered by the sheer scale of the debt inherited from the previous administration. The Akufo-Addo government's failure to manage the debt effectively has left the Mahama administration with a daunting task.
In a positive development, President John Dramani Mahama has honored the Payment-In-Cash (PIC) coupon of GHS6.081 billion to all Domestic Debt Exchange Programme (DDEP) bondholders. This move demonstrates the government's commitment to meeting its obligations under the DDEP. The payment is a significant step towards restoring confidence in the economy and reassuring investors.
The government has also honored the Payment-In-Kind (PiK) portion of GHS3.46 billion, deposited into the respective bondholders' securities accounts. This move is aimed at supporting the bondholders and ensuring that they receive their due payments.
Furthermore, the government has paid GHS9.7 billion into the Debt Service Recovery Cedi Account (Sinking Fund). This payment is a buffer for the 5th DDEP coupon that will fall due in July and August 2025. The government's commitment to meeting its debt obligations is a positive step towards restoring economic stability.
President Mahama's commitment to honoring the government's obligations under the DDEP has been welcomed by various stakeholders. The move is seen as a significant step towards restoring confidence in the economy and reassuring investors.
In reaction to the news, famous comedian and actor Michael Blackson expressed his excitement, stating that President Mahama has put a smile on the faces of kids at his free school. Michael Blackson also revealed that he is now an official member of the National Democratic Congress (NDC).
The government's efforts to manage the debt burden and support key sectors like energy are critical to Ghana's economic stability and growth prospects. As the country navigates this challenging period, it is essential that the government remains committed to meeting its debt obligations and implementing policies that support economic growth and development.
In conclusion, Ghana's debt burden is a significant challenge that requires careful management. The government's commitment to meeting its debt obligations and supporting key sectors like energy is a positive step towards restoring economic stability. As the country moves forward, it is essential that the government remains focused on implementing policies that support economic growth and development.
The Way Forward
To address the debt burden and support economic growth, the government should consider the following strategies:
1. Debt restructuring.The government should explore options for restructuring the debt to make it more manageable and reduce the burden on the economy.
2. Fiscal discipline.The government should maintain fiscal discipline and avoid taking on new debt that could exacerbate the problem.
3. Investment in key sectors. The government should continue to invest in key sectors like energy, agriculture, and infrastructure to support economic growth and development.
4. Economic diversification.The government should pursue economic diversification strategies to reduce the country's dependence on a few key sectors and make the economy more resilient.
5. Private sector participation.The government should encourage private sector participation in key sectors to bring in investment, expertise, and innovation.
By implementing these strategies, the government can reduce the debt burden, support economic growth, and improve the living standards of Ghanaians.