Ghana will not quit IMF deal but wants changes, says president-elect

ACCRA: Ghana’s President-elect John Dramani Mahama has said he will not abandon the country’s $3 billion rescue package with the International Monetary Fund (IMF), but wants to review the deal to tackle wasteful state spending and upgrade the energy sector.

Mahama, a former president who won the Dec 7 election by a wide margin, told Reuters late on Friday he would also seek to tackle inflation and currency depreciation to mitigate a cost-of-living crisis in the West African nation.

Mahama had said previously that he would renegotiate the IMF programme secured by the government of outgoing President Nana Akufo in 2023.

“When I talk about renegotiation, I don’t mean we’re jettisoning the programme,” Mahama said.

“We’re bound by it but what we’re saying is within the programme, it should be possible to make some adjustments to suit reality.”

Ghana’s electoral commission declared Mahama, who was in office from 2012-16, winner of the presidential poll with 56.55 per cent of the vote.

The president-elect of the world’s number two cocoa producer inherits a nation emerging from its worst economic crisis in a generation, with turmoil in its vital cocoa and gold industries.

FOCUS ON SPENDING, ENERGY

The IMF deal helped to halve inflation and returned the economy to growth, but Mahama said more work was needed to ease economic hardship.

“The economic situation is dire ... and I’m going to put my soul, physique and everything into it and focus on making lives better for Ghanaians,” said Mahama, whose National Democratic Congress party also won comfortably in a parliamentary vote held on Dec 7.

He said the “multiplicity of taxes” agreed to as part of the IMF programme had made Ghana “unpleasant for business”.

“We also think that (the IMF) have not put enough pressure on the government to cut wasteful expenditures,” he said, adding a review would aim to reduce spending, including by the president’s office.

“If the president is asking us to tighten our belt, he must also tighten his,” he said.

Mahama said the IMF had agreed to send an early mission to conduct a regular review, adding discussions would focus on “how to smoothen out the debt restructuring” that is now in its final lap.

He said a revised IMF deal would also seek sustainable solutions to the energy problems to avoid sustained power outages.

“We’re going to face quite a critical situation in the energy sector. The electricity company of Ghana is the ‘sick man’ of the whole value chain and we need to quickly fix it,” Mahama said.