SONA 2025: We will honor $346m coupon payment to Europe bond holders-President Akufo-Addo

This statement was made during his final State of the Nation Address in Parliament, where he outlined his administration’s significant strides in stabilizing the economy.

“Today, 3rd January 2025, my government will honor coupon payments to our Eurobond holders amounting to $346 million USD, We cannot afford to defraud on our debt repayments. That is the advice I give to the incoming Finance Minister,”President Akufo-Addo stated.

President Akufo-Addo provided a detailed overview of Ghana’s economic recovery, highlighting significant achievements in reversing negative trends.

The country’s economic growth rate for 2025 is projected at 6.3%, a substantial increase from the 3.4% recorded in 2017.

“Private sector credit has also rebounded, recording a nominal growth of 28.87% in October 2024, compared to a contraction of 7.5% during the same period in 2023. Real growth in private sector credit now stands at 5.5%, reversing the 31.6% contraction observed in October 2023,” he explained.

President Akuffo Addo continued that external balances have also improved, with Ghana achieving a current account surplus of 2.6% of GDP in the first nine months of 2024, a stark contrast to the deficit of 6.6% recorded in 2016. The trade balance has similarly shown progress, with a surplus of $3.85 billion in 2024 compared to a $1.8 billion deficit in 2016.

The President acknowledged the ongoing challenge of inflation, which stood at 23% in November 2024. However, this marks a significant improvement from the peak of 54% recorded in December 2022.

He projected further reductions as Ghana continues its efforts to restore debt sustainability, with debt-to-GDP expected to stabilize at 55% in net present value terms.

“These achievements demonstrate our firm commitment to the policies, structural reforms, and programme objectives under the IMF programme,” he emphasized.

Reflecting on the financial sector, President Akufo-Addo justified his administration’s controversial banking sector reforms, describing them as a necessary measure to safeguard the financial system.

“The banking sector cleanup was an act of necessity, not a vendetta. It was a bold and decisive intervention to safeguard the strength and integrity of Ghana’s financial system,” the President said.

Also, he noted that the reforms ensured that no depositor lost their savings despite the liquidation of several financial institutions. The cleanup also resulted in a more stable and resilient banking sector capable of driving economic growth.

On governance, the President highlighted his administration’s anti-corruption reforms, including the establishment of the Office of the Special Prosecutor and the passage of key legislation like the Fiscal Responsibility Act and the Criminal Offences Amendment Act.

Budgetary support for accountability institutions has seen significant increases, with allocations to the Auditor General, Parliament, and the Attorney General’s Office growing by over 100% since 2017. These measures, he said, have strengthened Ghana’s institutional capacity to tackle corruption effectively.

The results of these efforts were reflected in the 2023 Auditor General’s report, which recorded a 32% reduction in financial irregularities, saving the country 5.2 billion Ghanaian Cedis.

“It is hoped that the new government will continue with the policies being implemented to achieve the debt sustainability target,” he said.