Ghana’s new administration has begun talks with the International Monetary Fund (IMF) to adjust its $3 billion bailout program, aiming to ease ambitious revenue targets.
Why it matters
The current IMF deal, agreed upon before President Mahama took office, requires Ghana to boost revenue to 24% of GDP by 2028, a target he says needs a tax system overhaul for better compliance.
What he’s saying
- “We were not at the table when this agreement was drawn up,” Mahama said at the Munich Security Conference.
- “It’s necessary for us to look at the whole tax angle.”
- Despite concerns, he emphasized, “We are determined to continue with this program.”
The big picture
- Ghana, once a top investment destination, is recovering from a severe debt crisis that forced it to seek an IMF bailout in 2022.
- The country defaulted on most of its debt that year and has since restructured $13 billion in eurobonds, $5.1 billion in bilateral loans, and $13.2 billion in domestic debt.
- The IMF has signaled openness to adjustments as long as Ghana’s economic targets remain realistic.
What’s next
The administration will have to negotiate changes without jeopardizing IMF support while managing public expectations after Mahama’s landslide election win.
Source: Bloomberg
