Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has stressed the need for the government to prioritise Ghana’s natural resources as a primary means of generating internal revenue for development rather than relying on borrowing.

In his message to the President-elect, John Dramani Mahama, Dr. Kwakye stated that this approach would help prevent the nation from sinking deeper into its ongoing debt crisis.

“The Mahama administration must leverage Ghana’s natural resources as the main source of development financing. It must abandon the habit of borrowing to avoid further debt crises,” Dr. Kwakye stated on his X page.

He added, “It is the hope of Ghanaians that you will use the second opportunity and your experience to bring about the necessary change to meet their aspirations through inclusive government.”

Dr. Kwakye’s comments come against the backdrop of Ghana’s severe debt crisis, which has forced the government to adopt drastic measures, such as the Domestic Debt Exchange Programme (DDEP), to restructure its liabilities.

Under the current administration led by President Nana Akufo-Addo, Ghana’s public debt has ballooned to approximately $58 billion, representing 72.3% of GDP. This figure surpasses the cumulative debt accumulated by all previous administrations combined. It is estimated that the government has added about GH¢620 billion to the national debt since 2017.

The government has often attributed the debt crisis to external factors such as the COVID-19 pandemic and the Russia-Ukraine war. However, unsustainable borrowing, a depreciating currency, and dwindling international reserves have exacerbated the situation.

The DDEP, introduced to address these fiscal challenges, has had significant repercussions. Domestic bondholders, including pensioners and individual investors, suffered substantial losses due to reduced interest rates and extended repayment periods. These measures also triggered widespread protests, with pensioners arguing that they were unfairly targeted.