President John Dramani Mahama has told Parliament that it was only after he was sworn into office on January 7, this year he got to know the true extend of what he described as the broken state of Ghana’s economy.
The President said he inherited a heavily indebted Ghana that has its energy sector almost collapsed, cocoa sector massaged and with millions of unemployed youth who have as a result become despaired and frustrated, creating a major national security risks, amidst other daunting challenges in every sector of governance and the economy. .
“When I decided to run for President again, I did so because of what I knew about the state of our country. I was aware that huge problems awaited me upon my assumption of office. But nothing could prepare anyone for the reality of the depths to which our economy and governance have sunk.
“Our elders say that a frog’s true length can be ascertained only after it has died. And how right they are. 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”, President Mahama noted in his first State of the Nation Address (SONA) of his second term on Thursday, February 27, 2025.
President John Mahama read out the SONA to Parliament to fulfill the requirements of Article 67 of the country’s Constitution.
The President said the energy sector was almost collapsed as at the time he was sworn into office: “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.”
He gave a sad account of the country’s cocoa sector:
“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 fulfillment 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.
“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.”
