ON December 7, Ghana will head to the polls to elect a new president and parliament in what could be a pivotal moment for the nation’s economic trajectory. As President Nana Akufo-Addo steps down after two terms, the spotlight falls on the two frontrunners: former president John Dramani Mahama and current Vice President Mahamudu Bawumia. The stakes are high, with voters and investors closely watching how the winner will navigate Ghana’s recovery from a debt default and lead Africa’s second-largest cocoa producer into a new era.
The election also features 11 other candidates, but Mahama and Bawumia dominate the conversation. Both men bring contrasting visions for steering Ghana’s economy, which is currently under the lens of a $3bn IMF programme designed to stabilise its finances and rebuild investor confidence.
Debt, development, and investor concerns
Ghana’s election comes at a crucial time in its debt restructuring process. The country has restructured $13bn in international bonds, aiming to cut its debt by $4.7bn and provide $4.4bn in cash flow relief during the ongoing IMF programme, which runs until 2026.
The main hurdle remaining is an agreement with non-Eurobond commercial creditors, but investors are already looking beyond the debt restructuring. The critical question is whether the next administration will uphold reforms essential to restoring debt sustainability.
Mahama, 65, has indicated he would seek to renegotiate some IMF terms to secure more financing. His campaign has included promises to impose a public debt ceiling of 60-70 percent of GDP to curb over-borrowing. However, critics point to his previous presidency (2012-2017), during which debt soared due to ambitious infrastructure projects, while the country struggled with inflation and power outages.
Bawumia, 61, on the other hand, has pledged fiscal discipline and economic modernisation. His campaign promises include capping public spending at 105 percent of the previous year’s tax revenue and introducing a flat-rate tax scheme. He also plans to redirect 3 percent of GDP in public spending towards private sector partnerships for infrastructure development.
Can IMF terms be renegotiated?
Historically, incoming administrations often revisit IMF agreements. Ghana’s current IMF-supported programme is focused on restoring macroeconomic stability, reducing debt, and fostering inclusive growth. The Fund has signalled openness to adjustments if they align with Ghana’s long-term objectives.
However, any renegotiation will require a delicate balance. While Mahama seeks more lenient financing terms, Bawumia emphasises adhering to the programme’s fiscal discipline, a stance likely to appeal to investors wary of policy reversals.
Economic challenges await
Beyond debt, the next president will face pressing domestic issues. Ghana grapples with a cost-of-living crisis, high unemployment, and frequent power outages, all of which have strained public patience.
Mahama’s National Democratic Congress (NDC) has pledged increased spending on health, education, and infrastructure to stimulate growth and create jobs. Bawumia’s New Patriotic Party (NPP) prioritises inflation control and private investment to stabilise the economy and drive growth.
Analysts caution that Ghana’s heavy debt burden will limit fiscal flexibility. ‘Promises to improve economic circumstances will be tested against IMF demands for fiscal restraint,’ Oxford Economics noted in a report.
Cocoa, oil, and mining in focus
The election will also shape Ghana’s critical commodity sectors, which are central to its economy.
Oil and gas: Production in Ghana’s offshore oil fields has slowed over the past five years, but new licensing opportunities await. Mahama has proposed increasing local ownership in oil and mining projects, aiming to ensure that Ghanaians benefit directly from resource wealth.
Cocoa: The sector, vital to Ghana’s economy, is in dire need of reform. Cocoa output recently hit a 20-year low due to low farmer wages, plant diseases, and smuggling. Illegal gold mining has also destroyed cocoa plantations, adding to the challenges.
The IMF has urged Ghana to implement sweeping reforms in cocoa production, including the continuation of a new marketing model replacing a 30-year-old loan syndication approach. The global cocoa market will be watching closely to see how the next government tackles these issues.
The road ahead
Ghana’s election is more than a political contest, it is a referendum on how the nation will emerge from a turbulent period of debt, inflation, and economic uncertainty. For voters, it is about choosing a leader who can address everyday hardships. For investors, it is about policy consistency and the commitment to reforms.
Whether Mahama’s infrastructure-focused vision or Bawumia’s pro-investment policies will win the day remains to be seen. One thing is clear: the stakes for Ghana’s future could not be higher.
