IMF deal sets boundaries for radical reforms - John Mahama

Ghana’s incoming president John Dramani Mahama said a financing program with the International Monetary Fund will limit his government’s ability to undertake immediate radical reforms, a week after voters handed him a hefty mandate to fix the nation’s crippling debt burden and high cost of living.

The West African nation last year sought IMF help after it defaulted on debt that had ballooned to almost 100% of gross domestic product by the end of 2022. Under the IMF program, the government must achieve a primary budget surplus of 0.5% of gross domestic product by the end of this year.

“What it means is that the budgets must align with the IMF program, so there’s not much leverage in there for making the kind of radical reforms that you might immediately need to make,” Mahama, whose National Democratic Congress got about 56.6% of the vote in the Dec. 7 presidential elections, said in an interview with Voice of America posted on X.

“We already have requested some discussion with the IMF because we’re not part of the negotiation of this program.”

Last week, the IMF said it was open to renegotiating Ghana’s $3 billion financing program with the incoming administration, provided accompanying reforms aren’t jeopardized. Mahama reiterated an earlier position he won’t jettison the program, but says he sees room to tweak it and help stabilize the economy, with inflation at 23% at the end of November.

“Bringing down inflation is number one priority. Stabilizing the currency is number two. Bringing the deficit down, cutting expenditure, increasing revenues — I mean, those are the things that we need to be looking at,” Mahama said.

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