Amin Adam urges Mahama to mobilize funds as every government has done to manage our debts
Former Finance Minister, Dr. Mohammed Amin Adam, has criticized President John Dramani Mahama’s recent remarks regarding Ghana’s debt servicing obligations, urging him to focus on mobilizing funds as previous governments have done. During the “True State of the Nation Address” on Monday, March 3, Dr. Amin Adam countered President Mahama’s alarm over the country’s debt servicing requirements, asserting that managing the nation’s debt is a standard responsibility for any government and should not be used to create unnecessary panic.
In a recent statement, President Mahama raised concerns about Ghana’s debt obligations over the next four years. He projected that the government would need a staggering GH₵280 billion to service the country’s debt. This amount includes GH₵150 billion for domestic debt and GH₵130 billion for external debt. However, Dr. Amin Adam dismissed the President’s alarmist tone, arguing that such obligations are nothing new and should not be a cause for alarm. He stated that every government in Ghana has consistently dealt with debt service payments and that the President’s focus should be on finding solutions, rather than instilling fear among the public.
Dr. Amin Adam made it clear that debt servicing is an expected task for every administration, and the funds needed for it are typically mobilized as part of a government’s regular responsibilities. “The President’s attempt to create fear around the debt servicing obligations for the next four years is unnecessary,” he remarked. “Every government has had to provide for debt servicing, and the President is fully aware of this. He should be focused on mobilizing the necessary funds, as all past governments have done when facing similar challenges.”
Drawing a parallel to the New Patriotic Party (NPP) government’s handling of debt when the National Democratic Congress (NDC) left office in 2017, Dr. Amin Adam pointed out that the NPP faced a similar situation and was able to manage it effectively. He emphasized that managing the national debt is not a unique challenge but a routine aspect of governance that any responsible administration must address.
Furthermore, Dr. Amin Adam highlighted the success of the current administration’s debt management strategies. He pointed to the NPP government’s ability to renegotiate and reschedule Ghana’s debt obligations with official bilateral creditors. This included successfully securing a rescheduling of $5.4 billion in debt owed to these creditors, with repayments pushed back until after 2026. This move, according to Dr. Amin Adam, has significantly alleviated the burden of debt servicing in the short term and provides much-needed financial flexibility for the government.
The debt rescheduling agreement, Dr. Amin Adam explained, covers all debt service payments—both principal and interest—due between December 20, 2023, and December 31, 2026. As a result, the government will not be required to make any payments on bilateral debt until after 2026. This arrangement also includes amounts that were due for payment in 2023, as the government declared a standstill on the debt during that year.
Dr. Amin Adam also elaborated on the specific terms of the rescheduling. The deferred payments will be repaid in two installments, with the first installment due 16 years after the original due date and the second installment due 17 years later. The interest rates on these rescheduled debts will range between 1% and 3%, which Dr. Amin Adam described as highly favorable terms for Ghana. Importantly, this debt restructuring applies to all official bilateral creditors and to any ECA-backed facilities that were signed and disbursed before the end of 2022.
He emphasized that these measures have provided considerable financial relief to the current administration. The debt service relief generated by these negotiations amounts to $2.8 billion—money that would have been paid out in debt servicing but which now remains as a saving for the country. This, Dr. Amin Adam noted, is a crucial advantage for the government as it allows for more flexibility in managing public finances.
In conclusion, Dr. Amin Adam urged President Mahama to concentrate on sound economic management rather than attempting to sow fear about the country’s debt obligations. He stressed that debt management is a critical part of governance, and it is essential that every government, including Mahama’s, focuses on practical solutions to meet these challenges rather than unnecessarily alarming the public.
About The Author
