Accra, Ghana – February 27, 2025 – President John Dramani Mahama has declared Ghana’s economy to be in a state of crisis, citing high inflation, a depreciating cedi, and an unsustainable debt burden. Speaking during his State of the Nation Address to the 9th Parliament of Ghana, Mahama outlined a series of bold austerity measures aimed at stabilizing the economy and restoring fiscal discipline.
According to the President, the government inherited a severely weakened economy, with inflation reaching 23.8% in 2024 and public debt soaring to GHS 721 billion. He blamed excessive borrowing and economic mismanagement by the previous administration for the current financial turmoil.
Austerity Measures to Cut Government Spending
To curb government expenditure, Mahama announced a significant reduction in the number of ministers from 86 to 60, marking one of the most drastic cabinet downsizing measures in recent history. He also pledged to reduce non-essential government spending, enforce strict budgetary discipline, and improve tax collection to boost revenue.
“The era of wasteful spending is over. We must all make sacrifices to restore economic stability,” Mahama stated.
Additionally, a National Economic Dialogue will be convened to develop a homegrown fiscal consolidation plan, bringing together economists, business leaders, and policymakers to find sustainable solutions for Ghana’s economic recovery.
Debt Management and Economic Recovery
With Ghana’s debt crisis worsening, the President emphasized the need for strategic debt restructuring and the prioritization of critical infrastructure projects. He assured the public that his administration would engage international creditors and development partners to negotiate more favorable repayment terms.
On revenue generation, Mahama reiterated his government’s commitment to expanding the tax base while ensuring fairness in tax collection. “We will not burden the ordinary Ghanaian with excessive taxes, but we will ensure that everyone contributes their fair share,” he said.
Call for Unity in Economic Recovery
In his concluding remarks, President Mahama called on Ghanaians to unite in the face of economic hardship, urging businesses, civil society groups, and political stakeholders to support his government’s recovery efforts.
“The road ahead will not be easy, but with discipline, determination, and the collective effort of all Ghanaians, we will rebuild our economy and create a better future for generations to come,” he declared.
The coming months will be crucial as Mahama’s administration begins to implement these austerity measures. Many will be watching closely to see if these policies can steer Ghana’s economy back on track.
