Is Ghana in crisis, Mr. President? IERPP’s Audit of SONA 2025
On Thursday, February 27, 2025, President John Dramani Mahama presented his inaugural State of the Nation Address (SONA) to the 9th Parliament of Ghana, fulfilling his constitutional obligation under Article 67 of the 1992 Constitution. His speech focused on Ghana’s socioeconomic progress, fiscal stability, and infrastructure development. While commending successive administrations and this government for advancing Ghana’s commitment to democratic process, the Institute of Economic Research and Public Policy (IERPP), a nonpartisan think tank advocating for evidence-based governance and equitable economic policies, has analyzed the address on seven (7 ) thematic areas: economic crisis & recovery, governance & fiscal consolidation, social development, infrastructure & energy, anti-corruption & justice, security, and international relations. It is imperative to discuss each of these thematic areas for clarity and confirm or otherwise if indeed the country is in economic crisis at stated by our President.
On economic crisis & recovery, the President said Ghana’s economy, inherited by the current administration, is described as fundamentally “broken,” burdened by a staggering GHS 721 billion public debt, soaring inflation at 23.8% (2024), and a rapidly depreciating cedi that lost 27.8% of its value in 2023 alone. To address these challenges, the government has outlined a recovery strategy centered on hosting a National Economic Dialogue to foster stakeholder consensus, adhering to IMF-backed reforms to stabilize macroeconomic indicators, reducing the fiscal deficit to 5% of GDP, and prioritizing debt restructuring to restore sustainability. However, sectoral crises persist: the cocoa sector faces catastrophic losses of US840million due to mismanaged contracts, the energy sector is crippled by GHS70billion in legacy debts, and critical infrastructure projects worth US840million due to mismanaged contracts, the energy sector is crippled by GHS70billion in legacy debts, and critical infrastructure projects worth US2.95 billion remain stalled, exacerbating unemployment and hindering growth. These intersecting crises underscore the urgent need for cohesive, transparent, and inclusive policymaking to avert further economic collapse.
In terms of Governance & Fiscal Consolidation, our President remarked that the reduced ministerial appointments to 60 (from prior administrations) is to cut costs, streamlined government operations, digitized tax systems, and pledged austerity. He further criticized predecessors for “reckless debt accumulation” and mismanagement.
The government has prioritized social development through targeted initiatives aimed at addressing systemic inequities. To combat youth unemployment—estimated at 25–35%—programs like Adwumawura (supporting 2,000 startups with training and capital), the National Apprenticeship Programme (training 10,000 informal sector workers), and electric motorcycle hire-purchase schemes have been launched to create jobs and equip young people with skills. In education, reforms to STEM and TVET curricula aim to align schooling with modern job markets, while the controversial free SHS policy—retained despite criticism of overcrowded classrooms and funding gaps—has enrolled 1.4 million students but struggles with quality. Healthcare efforts focus on crisis response: aggressive vaccination campaigns tackled 6,300 cholera cases and 49 deaths in 2024, while revived mobile health vans and pledges for Free Primary Healthcare and MahamaCare (targeting non-communicable diseases like cancer) seek to improve access. However, chronic underfunding (e.g., GHS 15 billion health sector debt) and reliance on donor withdrawals (e.g., USAID’s $78 million cut) threaten these ambitions, highlighting the gap between policy promises and implementation realities.
The government has pledged to revitalize Ghana’s infrastructure and energy sectors through targeted interventions. In the energy sector, plans include resolving chronic power shortages (dumsor) by completing urgent repairs to the West African Gas Pipeline, enforcing the Cash Waterfall Mechanism to streamline revenue distribution, and expanding renewable energy infrastructure, such as solar power and electric vehicle charging stations, to reduce reliance on costly fuel imports. For transport infrastructure, efforts focus on addressing a GHS 20 billion debt owed to road contractors and reintroducing modernized toll systems to fund maintenance and new projects. In housing, stalled initiatives like the Saglemi Affordable Housing Project will be prioritized for completion, alongside low-cost social housing schemes to tackle the 1.8 million-unit deficit. These measures aim to stabilize critical sectors, stimulate job creation, and improve access to essential services for citizens.
The administration has intensified anti-corruption efforts through Operation Recover All Loot (ORAL), targeting high-profile scandals such as the National Service ghost names scheme, which allegedly siphoned GHS 50 million monthly through fraudulent payrolls. Complementing this, legal reforms include a comprehensive constitutional review to align governance with citizen aspirations, depoliticizing judicial appointments to restore public trust in the courts, and drafting legislation to regulate the sale of public assets, ensuring transparency. These measures aim to dismantle systemic corruption, strengthen accountability, and rebuild institutional integrity across Ghana’s governance framework.
The government has prioritized national security by tackling the proliferation of illegal military-grade weapons—a legacy issue threatening constitutional stability—while improving welfare for security personnel through better housing, equipment, and healthcare (e.g., completing the stalled Aferi Military Hospital). Reforms include depoliticizing recruitment processes for police and military roles to ensure transparency and launching enhanced counter-terrorism strategies, such as regional diplomacy, intelligence-sharing, and advanced surveillance technologies, to combat threats from violent extremism in the Sahel. These steps aim to restore public trust in security institutions and safeguard Ghana’s peace amid regional instability.
On international front, the President reaffirms Ghana’s commitment to a “Friends to all, enemies to none” foreign policy, prioritizing diplomacy rooted in mutual respect and non-alignment. Through economic diplomacy, the government aims to bolster trade partnerships, attract foreign investment, and diversify exports to stimulate job creation and economic growth. Concurrently, Ghana is spearheading efforts to reintegrate Sahelian neighbors—grappling with political instability and security threats—into regional blocs like ECOWAS and the African Union. This dual focus on fostering global economic ties and regional collaboration seeks to enhance stability, counter extremism, and strengthen collective prosperity across West Africa.
IERPP’s audit on thematic areas and by extension the SONA 2025, discovered that the word “crisis” is explicitly used 5 times in the SONA. Below are the exact quotes and the paragraphs in the speech:
1. “Our economy is in crisis, and our people are suffering unprecedented hardships.” Paragraph on Economic Crisis.
2. “These two events will allow us to present the real state of Ghana’s economic crisis to the people.” Announcement of National Economic Dialogue
3. “That, I, John Dramani Mahama, will fix the economic crisis confronting our country…” Commitment to Address Challenges
4. “One of the biggest crises we face is youth unemployment.” Youth Unemployment Section
5. “The road sector is in crisis, mainly due to years of mismanagement.”
Road Sector Challenges
Days after the speech, several organizations, economists, financial analysts and commentators have indeed confirmed or otherwise the position of the President. It is critical for IERPP’s to help our readers to understand the meaning of economic crisis, indicators that used to merit this status, and also confirm if the country inherited is in economic crisis as claimed by the President.
An economic crisis occurs when a country experiences a severe and prolonged downturn in economic activity, leading to widespread financial instability, declining growth, and hardship for businesses and households. Such crises are often characterized by factors like high inflation, currency depreciation, rising debt levels, and declining investor confidence. These indicators are grouped into Macroeconomic Instability and Structural and Social Collapse. A nation faces an economic crisis when high inflation erodes purchasing power, making basic goods unaffordable for citizens, while currency depreciation exacerbates this strain by increasing import costs. Simultaneously, elevated public debt levels—where debt servicing consumes a significant share of government revenue—signal fiscal distress, limiting public investment in critical sectors. Coupled with declining GDP growth, which reflects reduced economic output and productivity, these factors create a cycle of stagnation, unemployment, and weakened consumer confidence.
The crisis deepens with rising unemployment and underemployment, which stifle economic opportunities and income growth, particularly for the youth. Concurrently, banking sector distress—evidenced by liquidity shortages and non-performing loans—undermines financial stability, restricting credit flow to businesses and households. A balance of payments deficit further strains foreign reserves, while collapsing investor confidence deters foreign direct investment (FDI) and business expansion. These systemic failures often culminate in social unrest, as protests and strikes erupt over deteriorating living standards, highlighting the human cost of economic mismanagement. These intertwined indicators collectively signal a nation teetering on the brink of collapse, demanding urgent structural reforms and equitable policy interventions.
To help answer the question, IERPP’s audit further segmented Ghana’s economic journey from 2012 to 2024 into five (5) phases for better analysis and interpretation. From 2012 to 2024, Ghana’s economy experienced phases of growth, crisis, and recovery, reflecting both structural vulnerabilities and resilience. IERPP provides a year-by-year narrative of key indicators, followed by an analysis of why Ghana is not in an economic crisis as of 2024.
2012–2016: Growth amid structural weaknesses
In 2012, Ghana’s economy grew robustly at 7.9%, driven by oil exports from the Jubilee Field and strong cocoa production (879,000 metric tons). However, inflation began creeping upward, reaching 9.2%, while public debt stood at 48% of GDP. By 2013, growth slowed to 7.3% amid rising inflation (11.7%) and a weakening cedi (GH₵2.00/USD). The economy faced a sharp downturn in 2014 as global oil prices collapsed from 110 to 60 per barrel, slashing growth to 4.0% and pushing inflation to 15.5%. Debt surged to 56% of GDP, and the cedi depreciated to GH₵3.20/USD.
The challenges deepened in 2015-2016: growth stagnated at 3.8% and 3.7%, respectively, as inflation spiked to 17.5% (2016) and public debt hit 63% of GDP. The cedi fell to GH₵4.20/USD, and youth unemployment hovered around 25%. These years exposed Ghana’s overreliance on commodities and weak tax mobilization (tax-to-GDP ratio: 13%).
2017–2019: Stabilization through reforms
A turnaround began in 2017 under an IMF-backed reform program. Growth rebounded to 8.1%, inflation eased to 12.4%, and the cedi stabilized at GH₵4.50/USD. By 2018, growth moderated to 6.3%, inflation fell to 9.8%, and debt stabilized at 63% of GDP. In 2019, Ghana achieved lower-middle-income status with 6.5% growth, inflation at 7.9%, and debt at 65% of GDP. The cedi traded at GH₵5.50/USD, reflecting improved fiscal discipline.
2020–2021: Pandemic shock and fragile recovery.
The COVID-19 pandemic struck brutally in 2020, crashing GDP growth to 0.5%, inflating debt to 76% of GDP, and widening the fiscal deficit to 11.8%. Inflation rose to 10.4%, and the cedi weakened to GH₵5.80/USD. Cocoa production dropped to 800,000 MT due to climate and smuggling challenges.
A partial recovery followed in 2021: GDP grew by 5.4% as cocoa production rebounded to 1.05 million MT and gold prices surged. However, debt climbed to 80% of GDP, inflation hit 12.6%, and the cedi slid to GH₵6.00/USD.
2022–2023: Crisis Peaks
2022 marked Ghana’s worst economic crisis in decades. Debt ballooned to 92.4% of GDP, triggering a historic Eurobond default. Inflation skyrocketed to 54.1% (a 30-year high), driven by a collapsing cedi (GH₵15.50/USD) and global energy shocks. Growth slumped to 3.1%, while cocoa production fell to 750,000 MT.
In 2023, Ghana secured a $3 billion IMF bailout and restructured its debt to 70–75% of GDP. Inflation eased to 23.2%, and the cedi stabilized at GH₵12.50/USD. However, austerity measures sparked protests, and cocoa production plummeted to 600,000 MT due to illegal mining (galamsey).
2024: Stabilization and Recovery
By 2024, Ghana’s economy showed clear signs of stabilization. GDP growth inched up to 3.2%, supported by a rebound in cocoa production (700,000 MT) and surging global cocoa prices ($10,000/ton). Inflation declined to 22.8%(Q2), and the cedi traded steadily at GH₵12–13/USD. Debt stabilized at 75–80% of GDP, with the IMF program on track. Youth unemployment dipped slightly to 25%, while the fiscal deficit narrowed to 5.0–5.5% of GDP.
On macroeconomic progress, Ghana has averted an economic crisis through aggressive fiscal and monetary reforms. Successful debt restructuring slashed public debt from 92.4% to 75–80% of GDP, significantly reducing default risks. Coupled with stringent inflation control, headline inflation fell from 54.1% in 2022 to 15% in 2024, while food inflation eased from 35% to 27%, stabilizing household budgets. The cedi, which collapsed to GH₵15.50/USD in 2022, stabilized at GH₵12–13/USD due to improved foreign reserves (covering 3.5 months of imports), signaling restored investor confidence.
In terms of structural resilience & social safeguards, conomic diversification softened oil dependency, with non-oil sectors like ICT (+12%) and agribusiness (+7%) driving growth. Social protection programs, including the LEAP initiative (2.5 million beneficiaries) and sustained Free SHS enrollments (1.4 million students), cushioned austerity impacts on vulnerable groups. Fiscal discipline under the IMF program reduced the deficit to 5% of GDP, reinforcing Ghana’s credibility and laying a foundation for sustainable recovery. These measures collectively underscore Ghana’s shift from crisis management to cautious economic stabilization.
While Ghana faced a severe crisis in 2022–2023, 2024 marks a turning point. Inflation is declining, growth is broadening, and the cedi has stabilized. Though challenges like youth unemployment and debt persist, the economy is no longer in freefall. Structural reforms, IMF backing, and commodity windfalls have positioned Ghana on a recovery path, dispelling notions of an ongoing crisis. Sustaining progress will require deeper diversification, anti-corruption measures, and climate resilience investments as emphasized in SONA 2025.
IERPP disputes the president’s claim of economic crisis and states that the erstwhile administration rather averted economic crisis. Ghana is not in an economic crisis as of 2024 but remains in recovery phase.
