President Mahama Rules Out Immediate IMF Extension, Focuses on Fiscal Stability
President Mahama Focuses on Economic Reforms and Debt Management as IMF Extension is Not an Immediate Priority
- While future extensions are not ruled out, Mahama emphasized that the government remains focused
- President Mahama also shared details about his administration’s ongoing efforts to tackle Ghana’s economic challenges
- The fourth IMF review is scheduled for April
President John Dramani Mahama has made it clear that his administration has no plans to extend Ghana’s current $3 billion Extended Credit Facility (ECF) with the International Monetary Fund (IMF) in the immediate future.
While future extensions are not ruled out, Mahama emphasized that the government remains focused on following the existing programme and achieving fiscal stability.
In an interview with Bloomberg TV at the Munich Security Conference on February 16, 2025, Mahama stated, “We’ve not talked about an extension of the program. We are determined to continue with this program. If it’s necessary to look at additional funds or to extend the program, we’ll look at it, but for now, we are determined to continue on this trajectory.”
Strengthening Ghana’s Economic Policies
President Mahama also shared details about his administration’s ongoing efforts to tackle Ghana’s economic challenges, highlighting key areas of engagement with the IMF, including tax reforms, debt management, and fiscal discipline.
The $3 billion ECF, which was approved in May 2023, is set to support Ghana’s economic growth and stability over three years.
One major focus of the IMF discussions was tax rationalization. Mahama criticized the previous administration’s approach of imposing multiple taxes, which led to diminishing returns as the increased tax burdens resulted in lower revenue collection. He emphasized the need to simplify and streamline the tax system to promote better compliance.
“We had gotten to a stage where the more taxes that were put on, the less revenue that came in. And so it’s necessary for us to look at the whole tax handle, rationalize them, and make them more transparent, easy to understand,” he said.
The IMF has agreed to assist in reforming Ghana’s tax system, improving efficiency, and enhancing compliance among businesses and individuals.
Managing Debt and Promoting Fiscal Discipline
President Mahama also addressed the issue of Ghana’s growing debt, acknowledging the significant domestic debt obligations set to exceed $15 billion in 2025. To address this, the government has reactivated the sinking fund to facilitate debt repayments.
“We have to pay in excess of $15 billion on the domestic debt exchange. So what we’ve done is to reactivate the sinking fund and put more resources into it to take care of the repayments,” he noted.
In addition to managing debt, Mahama stressed the importance of fiscal discipline, including expenditure rationalization, to reduce waste and ensure that resources are directed toward priority programs.
Looking Ahead: Budget and IMF Review
As part of its economic strategy, the government is preparing for the presentation of the national budget in March, which will reflect insights from the IMF’s latest staff review. The fourth IMF review is scheduled for April, and Mahama noted that the budget would incorporate the IMF’s recommendations.
“We’re hoping to receive the aid memoir today or tomorrow, and looking at the issues that IMF raises, we will incorporate them in the budget,” he said.
Despite the challenges, President Mahama expressed confidence in Ghana’s relationship with the IMF, describing it as “cordial,” and reaffirmed his administration’s commitment to ensuring the success of the ECF programme to foster economic growth and stability in the country.
