Ghana’s Outgoing Leader Aims to Draw Line Under Debt Crisis

Yinka Ibukun and Ekow Dontoh
·2 min read
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(Bloomberg) -- Ghana’s outgoing president, Nana Akufo-Addo, is trying to close the chapter on the country’s debt crisis as his deputy and favored successor gears up to contest Dec. 7 elections.

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The West African nation is reworking its debt in line with the conditions of a $3 billion bailout it got from the International Monetary Fund last year. The government reached a deal with bilateral creditors last month to restructure $5.4 billion of loans and aims to reach a similar agreement with commercial creditors by the end of March.

“We are committed to concluding the external debt restructuring process as soon as possible, so we move past the crisis,” Akufo-Addo said in a state-of-the-nation address to parliament in Accra, the capital, on Tuesday.

The incumbent’s speech comes weeks after Vice President Mahamudu Bawumia, 60, began campaigning for the top job. His main rival is former President John Mahama, who will be looking to capitalize on the country’s economic and debt crises to win votes.

Ghana has halted payments on most of its external debt for more than a year, including on $13 billion of eurobonds. The country has seen frequent protests against rising living costs, with the inflation rate still hovering above 20%.

Read more: Ghana Vice President Aims at Top Job With Digital Shoutout

Akufo-Addo sought to defend some of the decisions his administration had made to meet the conditions of the IMF program, which requires Ghana to post a primary surplus in 2024 after years of running a deficit. Ken Ofori-Atta, the finance minister who led the country’s IMF negotiations, was replaced by his deputy, Mohammed Amin Adam, earlier this month.

The government took “a lot of unpleasant, but unavoidable measures, to bring stability and confidence back to the economy,” said Akufo-Addo, who is stepping down after serving the maximum two terms. “These included tax measures that we did not like, but we knew we had to take in the knowledge that the medicine would be bitter, but temporary.”

Bawumia has said he will utilize technology more effectively to shrink the government and ensure it is more effective. As vice president, he has led a digitalization drive that led to improved data collection, boosted financial inclusion and eased payment for government services.

These achievements are “improving transparency, accountability and efficiency in the public sector, and accelerating the growth of our economy,” Akufo-Addo said, hailing Bawumia as “Dr. Digitalization.”

“We were bruised, but we are healing,” he said. “We have recovered our footing. We have dusted ourselves off, and now we face tomorrow with confidence.”

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