Lome: President John Dramani Mahama has given his fellow African leaders a reflection and lessons on Ghana's journey in debt restructuring at the ongoing African Union Conference on Debt in Lome, Togo. The three-day Lome Meeting, which is being convened by the African Union Commission's Department for Economic Development, Tourism, Trade, Industry, and Minerals (ETTIM) is the theme: 'Africa's Public Debt Management Agenda: Restoring and Safeguarding Debt Sustainability.'
According to Ghana News Agency, the conference will convene AU Member States, policymakers, financial experts, and key stakeholders, including representatives from Ministries of Finance, African Central Banks, Regional Economic Communities, African Multilateral Financial Institutions, and Civil Society Organizations. President Mahama addressed the conference, emphasizing Ghana's challenging journey through debt restructuring to restore macroeconomic stability and rebuild investor confidence.
President Mahama noted that Ghana's debt history was emblematic of the broader African experience. In the early 2000s, under the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI), Ghana was able to significantly reduce its debt to GDP ratio, unlocking fiscal space for investments in crucial sectors such as education, roads, and health.
Between 2006 and 2015, successive governments, including Mahama's administration, strategically combined concessional and non-concessional financing to accelerate infrastructure development. However, unrestrained borrowing in subsequent years led to Ghana's debt to GDP ratio peaking at 90.7 percent in 2022, with escalating borrowing costs and currency depreciation.
In 2024, Ghana reached a $5.4 billion debt restructuring deal with bilateral creditors under the G20 Common Framework, offering essential relief yet leaving a complex recovery path ahead. President Mahama outlined three key lessons from Ghana's experience: timely creditor engagement, flexible multilateral support aligned with domestic priorities, and a focus on sustainable debt usage and governance.
Highlighting the need for transparency and accountability, Mahama urged African leaders to strengthen parliamentary oversight, enhance public debt audits, and promote open budget systems. He emphasized productive and responsible borrowing, focusing on high-impact projects in value-added agriculture, renewable energy, infrastructure, and education sectors.
Mahama also called for regional solidarity and global financial reform, advocating for a unified African voice to push for fairer global financial rules. He urged credit rating agencies to adapt methodologies that consider African economies' growth potential and called for building the capacity of African financial institutions to offer concessional financing.
He concluded by promoting innovation in debt strategy, suggesting debt-for-climate swaps as a model for resilience financing, following Barbados' example. Africa, he argued, must embrace innovative approaches to transform debt into a tool for development.
