Economic Advisor at the Office of the Vice President, Professor Sharif Mahmud Khalid, has said the financial market is responding positively to the signals given by President John Dramani Mahama.
He noted that the government inherited an “overheated economy” from the New Patriotic Party (NPP) administration. However, the signs are clear that all the economic indicators are pointing in a positive direction.
Speaking on the KeyPoints on TV3 on Saturday, March 1, Prof Khalid indicated that the signal to cut down the size of the government had a significant effect on the economy.
“This government inherited a very overheated economy, with all signs of the economy going negative.
“The market is responding positively due to the signals that the president sent,” he said while contributing to a discussion on the State of the Nation Address (SONA) delivered by President John Dramani Mahama on Thursday, February 27.
During the SONA, President Mahama said among other things that “It is common knowledge that our economy is in dire straits, which is putting it mildly. Because, after an initial assessment of the books, we have discovered that the economic problems are much deeper than was previously known. We have inherited a country that is broken on many fronts,” he stated.
According to President Mahama, the country’s public debt has ballooned to GH₵721 billion, with major state-owned enterprises like the Electricity Company of Ghana (ECG) and COCOBOD heavily indebted, owing GH₵68 billion and GH₵32.5 billion, respectively.
The President further revealed that COCOBOD was unable to supply 333,767 metric tons of cocoa that had already been sold at $2,600 per ton in the 2023/2024 crop season, leading to a massive revenue loss of $840 million. Additional losses of $495 million are expected as more cocoa is supplied under rolled-over contracts.
The energy sector is also facing a serious financial shortfall of approximately GH₵34 billion for 2025 due to inefficiencies, legacy debts, and non-compliance with financial regulations. President Mahama lamented that despite the government’s previous spending of GH₵29.9 billion on a financial sector cleanup, the sector continues to struggle.
He further exposed the severity of Ghana’s debt servicing obligations, revealing that in the next four years, debt payments will amount to GH₵280 billion – GH₵150 billion for domestic debt and GH₵130 billion for external debt.
Despite the daunting challenges, President Mahama expressed his administration’s determination to restore fiscal discipline and economic stability. He announced measures to complete ongoing structural reforms, implement corrective fiscal policies, and build buffers in the sinking fund to support debt repayments.
“We are doubling our efforts to complete all outstanding structural reforms. Through the budget, we will implement corrective measures to restore fiscal discipline and debt sustainability,” he assured.
3news.com
