His Excellency, John Dramani Mahama has delivered his maiden State of the Nation address in accordance with article 67 of the 1992 constitution of Ghana.
In thanking the good people of Ghana for the confidence reposed in him and for a huge majority in parliament, he pledged to run with a lean administration, which he had already implemented, looking at the appointment of 60 ministers, regional inclusive, he also hoped it would set the pace for future governments.
The state of our nation is not good
“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 our economic problems are much deeper than was publicly known. We have inherited a country that is broken on many fronts. The profundities of the challenges are staggering.
We are saddled with staggering debts and glaring signs of almost deliberate and, in some cases, criminal mismanagement of our resources.
Mr. Speaker, not even the restraints of an IMF programme were enough for the previous economic managers to exercise prudence in managing our finances.
After setting an inflation target of 18% by the end of 2024, the actual rate was 23.8%, significantly exceeding the IMF threshold. The Ghana cedi continued its downward slide, losing 19% of its value against the dollar in 2024. It had already lost 27.8% in value in 2023.
In addition to the public debt, which amounts to a staggering GHS 721 billion, several State-Owned Enterprises are also in debt, including ECG, which owes GHS 68 billion.
Ghana Cocoa Board—the hope of cocoa farmers—is also highly indebted. Its balance sheet indicates a total debt of GHS 32.5 billion, of which GHS 9.7 billion is due to be paid at the end of September 2025.
In the 2023/2024 crop season, COCOBOD could not supply three hundred and thirty-three thousand seven hundred and sixty-seven (333,767) tonnes of cocoa, which it sold at US$ 2,600 per tonne. As a result, the then management of COCOBOD rolled over these contracts into the 2024/2025 cocoa season.
This implies that for every tonne of cocoa delivered this year in fulfilment of the rolled-over contracts, COCOBOD and the Ghanaian farmer would lose US$ 4,000 in revenue.
Mr. Speaker, as I address this honourable house, COCOBOD has supplied 210,000 tonnes out of the rolled-over contract, resulting in a revenue loss of US$ 840 million for both COCOBOD and the Ghanaian farmer.”
Debts
“COCOBOD and the Ghanaian farmer will lose another US$495 million when the Board finishes supplying the remaining rolled-over contracts additionally, cocoa road commitments alone total GHS 21.7 billion, of which only GHS 4.4 billion is included in the total debt of GHS 32.5 billion. This debt has arisen mainly because of the decision in 2019 and 2020 to award road contracts worth over US$1 billion because of the election.
Additionally, cocoa road commitments alone total GHS 21.7 billion, of which only GHS 4.4 billion is included in the total debt of GHS 32.5 billion. This debt has arisen mainly because of the decision in 2019 and 2020 to award road contracts worth over US$1 billion because of the election.
Mr. Speaker, the energy sector faces significant financing challenges primarily due to collection and system losses, non-compliance with the Cash Waterfall Mechanism, and legacy debts.
The financing shortfall has risen considerably to approximately US$2.2 billion or GHS 34 billion for 2025, and urgent measures will be needed to reduce it to sustainable levels and ultimately eliminate it.
The financial sector continues to struggle despite the previous government reportedly spending GHS 29.9 billion on the financial sector clean-up exercise to date.
They also left scant reserves for debt servicing despite implementing what may be considered the most severe and distressing economic policy in the annals of the Fourth Republic, if not in the entirety of our nation’s history—the Domestic Debt Exchange Programme.
This is in stark contrast to our actions in 2017, before we left office, when we allocated US$ 250 million to the Sinking Fund to service debt.
While there have been claims that buffers were left for debt repayment, the statement of accounts for the Debt Service Reserve Account, also known as the Sinking Fund, shows a balance of only $64,000 and GHS 143 million in the dollar and Ghana cedi accounts, respectively.
The repercussions of reckless debt accumulation and economic mismanagement will require extensive work and sacrifice to repair.
In the next four years, debt servicing will amount to GHS 280 billion, comprising GHS 150 billion for domestic and GHS 130 billion in external debt servicing”.
Energy
“Mr. Speaker, my administration inherited an energy sector on the brink of collapse, which was weighed down by unsustainable debts. This unfortunate situation has led to many Independent Power Producers (IPPs) and fuel suppliers threatening to cease their operations.
Despite collecting over GHS 45 billion in Energy Sector Levies (ESLA) over the last eight years, the outgone NPP administration has left the Ghanaian people an energy sector burdened with a staggering GHS 70 billion debt as of December 2024.
It is of deep concern that several state-owned enterprises (SOEs) in the energy sector are struggling to stay afloat. Unless urgent interventions are made, many of them will go under.
Financial distress in the energy sector remains a significant obstacle to delivering consistent and affordable electricity to Ghanaians and poses an existential threat to the economy in general.
Compounding these challenges, critical maintenance activities—such as the scheduled pigging of the West African Gas Pipeline (WAPCO)—were postponed from 2024 to 2025 without sufficient contingency measures for alternative fuel supply.
As a result, my administration has had to swiftly mobilise resources to secure emergency fuel supplies, ensuring that electricity generation continues despite the difficult circumstances.
I have been informed that the pigging exercise will be completed in the first weeks of March. Once additional gas flows from Nigeria, we anticipate a marked improvement in the power situation.
While the current state of the energy sector poses grave concerns, we must remain resolute in our commitment to restoring stability. I have directed the Minister for Energy and Green Transitions to implement far-reaching reforms, including enforcing a single revenue collection account, strictly adhering to the Cash Waterfall Mechanism (CWM), and eliminating wasteful expenditures.
The Minister, following my directive, has set up an advisory committee to guide the participation of the private sector in metering and billing in order to improve efficiency in revenue collection and reduce the high commercial and technical losses that are threatening to drown the state-owned utility company.
A pilot partnership between ECG and Enclave power has proved highly successful and provides us with a workable framework. ECG provides bulk supply of power to Enclave Power Limited. Enclave Power provides meters and bills all companies operating in the Free Zones Enclave with 99% revenue collection and nearly 100% uptime in power supply.
Reduction in commercial and technical losses will lead to affordable tariffs for everyone and bring relief to all users of electric power. We also aim in the medium term to achieve 100% gas utilisation for power production and eliminate the use of crude oil.
This will save Ghana hundreds of millions of dollars spent on the importation of fuel oils for power production.
With regards to renewable energy, this administration will soon operationalise a Renewable Energy and Green Transition Fund to enhance efficiency and accelerate Ghana’s transition to renewable energy.
This initiative will drive investment in sustainable energy solutions, including solar street lighting, rooftop solar installations, off-grid solar systems, electric vehicle charging stations, and chargeable outboard motors. These measures will reduce dependence on the national grid and position Ghana as a leader in Africa’s green energy transition.”
The president also touched on petroleum by bemoaning the swift decline of crude oil production shrinking by more than 32% as a result of opacity levels, hostile business climate and excessive political interference, resulting in major oil companies exiting and stalling upstream activities.
He reiterated his commitment towards food security, agriculture, and agro-processing, lowering of food inflation, education, expansion of STEM programmes at all levels of education and creation of sustainable jobs.
