SONA 2025: President Mahama warns that our economy is in critical condition

In his first State of the Nation Address since taking office, President John Dramani Mahama provided a sobering assessment of Ghana’s economic situation, describing it as being in “dire straits” and far more precarious than previously believed. The President’s address revealed the depth of the financial challenges the country faces, including skyrocketing national debt, unstable public institutions, and widespread economic instability inherited from the prior administration.

President Mahama emphasized that Ghana’s economic troubles were far more severe than anticipated. “It is widely known that our economy is in dire straits, and that is an understatement,” he remarked. After conducting a thorough review of the national finances, he revealed that the problems were much more complex than initially understood. “We have inherited a nation in distress on many fronts,” he stated, acknowledging the immense challenges ahead.

One of the key issues identified by President Mahama was the country’s rapidly growing public debt. The total national debt has now reached a staggering GH₵721 billion. This includes significant liabilities tied to state-owned enterprises, which are themselves struggling with financial instability. The Electricity Company of Ghana (ECG) is one such example, burdened with GH₵68 billion in debt. COCOBOD, the organization responsible for the country’s cocoa industry, also faces a massive debt of GH₵32.5 billion. Adding to the financial distress, the President disclosed that COCOBOD was unable to deliver a portion of the cocoa it had already sold, leading to an enormous loss of revenue. Specifically, the organization failed to supply 333,767 metric tons of cocoa, which had been sold at $2,600 per ton for the 2023/2024 season. This failure resulted in a staggering revenue shortfall of $840 million. Furthermore, additional losses of $495 million are expected as COCOBOD continues to supply cocoa under existing contracts.

The energy sector, another critical pillar of Ghana’s economy, is also grappling with significant financial difficulties. The sector is facing a projected shortfall of GH₵34 billion for the year 2025, primarily due to inefficiencies, legacy debts, and non-compliance with financial regulations. President Mahama pointed out that despite previous efforts to address these issues, including a GH₵29.9 billion expenditure aimed at cleaning up the financial sector, the situation remains dire. The financial sector continues to experience challenges, hindering economic progress.

In addition to these immediate financial troubles, President Mahama outlined the immense burden of Ghana’s debt servicing obligations. He revealed that over the next four years, the government will be required to make debt payments totaling GH₵280 billion. This sum includes GH₵150 billion in domestic debt payments and GH₵130 billion in external debt obligations. These mounting debt servicing costs further strain the country’s fiscal capacity and hinder efforts to invest in critical areas like infrastructure, education, and healthcare.

Despite these overwhelming challenges, President Mahama expressed a clear determination to rebuild the economy and restore fiscal discipline. He outlined several key measures that his administration will implement to address these issues. First, the government will focus on completing the structural reforms that are already underway, ensuring that necessary changes are made to improve the efficiency and sustainability of key sectors. Additionally, the President pledged to take corrective fiscal actions to stabilize the economy and manage debt more effectively. Efforts to build up a sinking fund will also be intensified, helping to create a buffer for future debt repayments.

President Mahama also reaffirmed the country’s commitment to the International Monetary Fund (IMF) supported program, with the next review of Ghana’s performance scheduled for between April 2 and April 15, 2025. This review will pave the way for a potential IMF board approval in June. These steps are expected to provide further support to the country’s economic recovery.

Finally, the President called on the Ghanaian people, businesses, and investors to place their trust in his administration’s ability to turn the economy around. He pointed to the actions already taken since January 7, 2025, including reducing unnecessary government spending and decreasing the country’s reliance on borrowing. These measures have already begun to bring down interest rates, which in turn, is expected to stimulate economic growth. “With the transparent and prudent measures we have implemented, I urge all Ghanaians, business owners, and foreign investors to have confidence in our capacity to restore our country’s economic prosperity,” President Mahama concluded.