Ghana, Africa’s largest gold producer, is struggling with economic challenges despite its abundant natural resources. The country, which reached a record inflation rate of 54%, is unable to borrow from China, a key lender, due to its declining credit rating. This has left Ghana unable to secure loans from international markets.
With a GDP of $76.63 billion in 2023, Ghana is the second-largest economy in the West African Economic Community (ECOWAS). The country’s economy relies heavily on natural resources, including gold, oil, gas, and cocoa. In 2022, Ghana surpassed South Africa to become Africa’s largest gold producer, and it ranks second globally in cocoa production, after Côte d’Ivoire.
Ghana’s Economic Crisis
However, 2022 marked a critical year for Ghana’s economy. The country’s total debt reached $55 billion, with more than 70% of government revenue allocated for debt repayments. Unable to manage this debt burden, Ghana declared it could not meet its obligations in December 2022, defaulting on its debt.
In May 2023, the International Monetary Fund (IMF) provided a $3 billion support loan, but this was not enough to quickly stabilize the economy. Economic growth is not expected to return to normal levels until 2027.
New President’s Goal: Revitalizing Ties with China
On December 7, 2024, John Dramani Mahama was elected as Ghana’s new president. Prior to taking office, Mahama met with China’s Ambassador to Ghana, Tong Defa. On social media platform X, Mahama shared that Ambassador Tong conveyed congratulations from Chinese President Xi Jinping, highlighting the longstanding cooperation between the two nations since Ghana’s first president, Dr. Kwame Nkrumah.
Mahama addressed Ghana’s $5.35 billion debt to China and the effects of the country’s default. However, he believes that through economic reforms, they will improve the country’s credit rating and strengthen cooperation with China.
“We will stabilize the currency, revive the economy, reduce inflation, and promote growth. We will work more closely with all our partners, including China,” Mahama stated. He also emphasized that, once in office, he would begin talks with China to explore technical cooperation and opportunities under the Belt and Road Initiative.
