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The International Monetary Fund (IMF) has indicated its willingness to renegotiate Ghana’s $3 billion financing program with the incoming administration of President-elect John Dramani Mahama, as long as the accompanying reforms remain intact.
“IMF-supported programmes are developed collaboratively with each country’s authorities,” an IMF spokesperson stated in a response to Bloomberg. “Any changes must ensure that the economic objectives of the reform programmes remain achievable.”
The IMF’s extended credit facility program, which began in May 2023, is designed to help Ghana restore macroeconomic stability, ensure debt sustainability, and foster inclusive and sustainable growth, the spokesperson added.
Ghana turned to the IMF after a severe debt crisis left the country unable to service its loans. By the end of 2022, Ghana’s public debt had ballooned to nearly 100% of gross domestic product (GDP), triggering economic challenges such as high inflation and currency depreciation. Inflation peaked at 54.1% two years ago before declining to 23% by November 2024. Meanwhile, the Ghanaian cedi has lost about 60% of its value over the past four years, and the central bank raised interest rates to a record 30% before lowering them to 27%.
Under the current IMF program, the government is tasked with achieving a primary budget surplus of 0.5% of GDP by the end of 2024 and reducing the debt-to-GDP ratio to 55% by 2028.
President-elect Mahama, who won the recent election with 56.6% of the vote against Vice President Mahamudu Bawumia, has expressed his intention to renegotiate the IMF deal. He aims to ease the repayment terms for restructured loans and reduce the corporate tax burden. Additionally, Mahama has pledged to prioritize economic stability over growth once he assumes office on January 7.
“We do not expect the NDC to walk away from the current IMF programme,” Barclays Plc stated in a note to clients. “It seems reasonable to expect a renegotiation to help align the NDC’s economic preferences and tactical macro signalling with the programme.”
The IMF’s readiness to work with the incoming government reflects its flexible approach to ensuring that reform objectives are met while accommodating Ghana’s evolving economic priorities.
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