President John Dramani Mahama has announced that Ghana’s total debt burden has been significantly reduced due to the recent strengthening of the Ghanaian cedi.
Speaking at the Annual Meetings in Abidjan on Tuesday, May 27, Mahama revealed that the country has cut its debt by nearly GHS150 billion over the past five months.
According to Mahama, the depreciation of the cedi in previous years was a major factor contributing to the country’s growing public debt. “One of the push factors for the debt is the value of the local currency,” he explained.
“Our debt continued to multiply because the cedi continued to grow weaker and so you needed more cedis. Because our public debt is stated in cedis, the weaker the cedi becomes against foreign currencies, the higher it pushes up your debt,” he added.
However, the President credited recent policy measures for helping to stabilize the economy, resulting in the cedi’s strengthening and significant fiscal relief.
“Fortunately, some measures we put in place have recently begun to show results, and the cedi has been strengthening,” Mahama said. “So we’ve reduced our total debt over the last five months by almost GHS150 billion, which is very significant.”
Mahama expressed optimism that if this positive trend continues, Ghana could meet its debt sustainability target ahead of schedule.
“If that trajectory continues, the target of reaching 55% to 58% debt sustainability by 2028 will be reached by the end of this year,” he stated. “That means it gives us fiscal space to invest in the most productive sectors of the economy.”