Former Ghanaian president John Dramani Mahama will try to renegotiate terms of an International Monetary Fund (IMF) bailout and boost local ownership of future oil and mining projects if he wins a new term in office in December, he told Reuters.
Mahama, who was in office from 2012-2016, will be the main challenger to the ruling party’s candidate, Vice President Mahamudu Bawumia, with a good chance to win given a severe economic crisis that has made the government unpopular.
“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 issues,” Mahama, 65, said in an interview.
Ghana defaulted on most of its $30 billion external debt in 2022 after the effects of years of overstretched borrowing were exacerbated by the COVID-19 pandemic, knock-on impacts of the war in Ukraine, and higher global interest rates.
The oil, gold, and cocoa producer secured a $3 billion IMF bailout in May 2023, and in June this year reached separate deals with bilateral and commercial creditors to restructure its debts and freeze repayments until 2025.
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 manage the debt repayments.
Mahama also said he would amend a public-finance management law to introduce a compulsory debt-to-GDP ceiling of 60-70% to prevent excessive borrowing.
Additionally, he emphasized he would respect existing production contracts with oil and mining companies and not seek to raise taxes, but rather aim for higher royalties.
“I might consider a super range of taxes on profit… But I do think that in some cases we could have negotiated higher stakes in the royalties is low.”
Mahama’s plans also include increasing government stakes in future projects via the Ghana Infrastructure Investment Fund, a sovereign wealth vehicle.
Reuters
