President Mahama affirms commitment to ongoing IMF program, No immediate plans for extension

President John Dramani Mahama has affirmed that his administration has no immediate plans to extend Ghana’s $3 billion Extended Credit Facility (ECF) with the International Monetary Fund (IMF), despite the option remaining available in the future. Speaking in an interview with Bloomberg TV at the Munich Security Conference, Mahama emphasized that his government is committed to continuing with the current program.

“We’ve not talked about an extension of the program. We are determined to continue with this program,” he said, adding that the possibility of additional funds or an extension would be evaluated if necessary.

The $3 billion ECF, approved on May 17, 2023, is designed to support Ghana’s economic stability and growth over three years. President Mahama outlined key proposals presented to the IMF, focusing on critical areas such as tax rationalization, debt management, and fiscal prudence to drive the country’s economic recovery.

A major focus of the discussions with the IMF was tax rationalization. Mahama criticized the previous administration’s approach of imposing multiple taxes, which he argued led to diminishing returns and lower revenue collection. “The more taxes that were put on, the less revenue that came in,” he explained.

To improve compliance and revenue growth, Mahama revealed that the IMF has agreed to provide technical assistance in streamlining Ghana’s tax system. This is aimed at creating a more transparent and efficient tax system to support sustainable revenue growth.

Addressing the issue of Ghana’s mounting debt, Mahama highlighted the significant repayments due in 2025, particularly domestic debt obligations exceeding $15 billion. He outlined the government’s proactive measures to manage these challenges, including reactivating the sinking fund to facilitate debt repayments.

Mahama stressed the importance of fiscal discipline, stating that expenditure rationalization remains a key priority. He emphasized the need to reduce waste and reallocate resources to more priority programs.

Looking ahead, President Mahama highlighted the upcoming budget presentation in March, which will incorporate insights from the IMF’s latest staff review. The fourth IMF review is set for April, and the government is aligning its fiscal policies with IMF recommendations.

“We’ll present the budget in March, and it will take into focus some of the issues that have come out from the staff mission,” Mahama explained.

Despite the ongoing economic challenges, Mahama expressed confidence in Ghana’s relationship with the IMF, describing it as “cordial,” and reaffirmed his administration’s commitment to the successful implementation of the ECF program to steer the country toward economic stability and growth.