As Ghana prepares for a new administration under President-elect John Dramani Mahama, the country faces significant economic challenges that will require immediate attention. During a thanksgiving service on December 15, 2024, Mahama openly acknowledged the severity of the economic crisis, stating, "Our country is still in a very severe economic crisis" and emphasizing the tough journey ahead for recovery. He expressed his determination to tackle these issues through strategic planning and faith, highlighting the need for careful decision-making in selecting advisors [d0aee463].
Mahama's administration will inherit a precarious financial landscape, with debt servicing obligations totaling approximately GH¢30 billion (US$2 billion) over the next four years. He has pledged to restore fiscal balance and renegotiate the existing IMF deal, which is crucial as Ghana finds itself locked out of international capital markets and reliant on domestic revenue for funding [993af515]. The economic situation has been exacerbated by a staggering US$1.5 billion debt owed to independent power producers (IPPs), which poses an immediate risk of power outages that could further destabilize the economy. Inflation, which peaked at 54.1% in December 2022, has shown some signs of easing, dropping to 20.4% in August 2024, but it has begun to rise again, reaching 23% in November 2024 [993af515]. The cedi has depreciated over 60% against the dollar in the past three years, adding to the financial strain on households and businesses alike.
In his address, Mahama expressed faith in Ghana's potential for recovery, stating, "God’s favour is still on our dear country Ghana." He also hinted at the possible appointment of Cassiel Ato Forson as Finance Minister, indicating a focus on experienced leadership in economic management [d0aee463]. Haruna Iddrisu, MP for Tamale South, has highlighted the difficulties Mahama faces, expressing confidence in his ability to manage these issues while underscoring the importance of accountability to the Ghanaian people, who will respond to any failures [43476c85].
During his previous tenure from 2012 to 2016, Mahama oversaw a significant increase in the debt-to-GDP ratio, which rose from 32% to 73%. Although the current Akufo-Addo administration managed to reduce the fiscal deficit, the debt-to-GDP ratio continued to climb, raising concerns about long-term sustainability [993af515]. The Domestic Debt Exchange Programme launched in 2022 faced backlash, highlighting the challenges of managing public debt in a politically charged environment.
Mahama criticized the outgoing Akufo-Addo administration for worsening economic conditions, acknowledging the tough road ahead for his administration. The National Democratic Congress (NDC), led by Mahama, capitalized on the ruling party's perceived economic mismanagement during the 2024 elections, with key issues including illegal mining (galamsey), the unpopular E-Levy tax, and various governance scandals dominating the campaign narrative. As Mahama prepares to take office, the focus will be on addressing these pressing economic issues while navigating the political landscape that contributed to his party's electoral success [43476c85].
Akufo-Addo congratulated Mahama on December 9, 2024, following the December 7 elections, and committed to a smooth power transition on January 7, 2025. He invited Mahama to Jubilee House on December 11, 2024, to begin the transition process [43476c85]. In the broader context, Ghana's economic recovery efforts are ongoing, with the previous administration reporting a growth rate of 5.8% in the first half of 2024, attributed to fiscal discipline and successful debt restructuring. However, the new government will need to build on this foundation while addressing the immediate concerns of debt, inflation, and energy supply to ensure a stable economic future for the country [7b94ab34].