Ghana’s Mahama plans IMF deal renegotiation if re-elected

Former Ghanaian President John Dramani Mahama plans to renegotiate the terms of an International Monetary Fund (IMF) bailout and increase local ownership in oil and mining projects if he wins the country’s December election, he told Reuters.

“I’ve been in an IMF programme before, when I was president, and I know that the IMF is not averse to sitting and talking and renegotiating.”

Ghana defaulted on most of its $30 billion external debt in 2022, driven by years of excessive borrowing, the COVID-19 pandemic, the Ukraine war, and rising global interest rates.

In May 2023, the oil, gold and cocoa producer secured a $3 billion IMF bailout.

The IMF has already disbursed $1.56 billion with another $360 million due by December.

But Mahama said he would seek additional IMF funds to help Ghana resume the debt repayments.

“We are going to renegotiate the bailout and make sure that some more money is added, even in the time when we’re going to go into debt repayment.”

He also promised to respect existing contracts with oil and mining companies but hinted at higher government stakes in future projects. “I think that we are in the upper range of taxes on profit and so I do not think that new taxes are intended for that industry. But I do think that in some cases the level at which we locked in the royalties is low.”

Mahama, who served as president from 2012 to 2016, will be the main challenger to the ruling party’s candidate.

With the country facing a severe economic crisis and discontent with the government growing, he has good chances of winning.

Ghana is one of Africa’s most stable democracies, with a history of peaceful transfers of power.

No party has ever won more than two consecutive terms in government.