Can Mahama realistically renegotiate the IMF deal if elected?

The flagbearer of the opposition National Democratic Congress (NDC) John Dramani Mahama has emphatically stated that, he will renegotiate the agreements of the International Monetary Fund (IMF) that the country is currently grappling with, if he wins the upcoming 7^th December 2024 elections.

In an interview with Reuters, he stated that, his renegotiation will enhance local ownership of future oil and mining projects in the country.

The former president stated that as a former president, he had been in an IMF programme before, and he knows that the Bretton Wood institution was not averse to renegotiation.

In this article, I seek to find out if it is feasible for a new government to renegotiate an IMF deal and Extended Credit Facility long after the institution has implemented disbursements of funds.

Available information suggests that, indeed it is possible for a new government to renegotiate an existing IMF agreement even after disbursements of funds have taken place.

Nonetheless, any form of renegotiation with the IMF by a new government is very difficult and hinged of several factors. More countries are on record to have renegotiated their terms of agreements with the IMF by new governments. The renegotiations became necessary as a results of economic challenges, and in ability to conform to the agreed terms.

IMF programmes are usually designed to be adjustable to changing economic and political conditions in a country. The Bretton Woods institution is cognisant to the fact that countries are likely to experience change of governments which can ultimately lead to new directions and policies. Therefore, modifications are allowed to on existing agreement by the new government.

There are some examples of new governments successfully renegotiating IMF deals for their countries.

In 2019, Argentina had a successful renegotiation with the IMF. After a change in government in 2019, the government of Alberto Fernández sat down with the IMF and successfully renegotiated the agreement signed by the previous administration. The aim of the new government was to ease up the austerity measures imposed on the citizenry and extend the repayment plan in order to make the program more convenient due to the country’s economic crisis.

In 2015, Greece underwent arguably the most well-known cases of renegotiation with the IMF. This was after the Syriza party came to power, their aim was to renegotiate the terms of Greece's bailout program with the IMF as well as their European creditors. Even though the negotiations were belligerent and difficult, in the final analysis, the program’s terms were adjusted to reflect the new government's programmes, policies and priorities.

Additionally, in 2014, after the 2014 Ukrainian revolution and a change in government, the IMF revised its agreement with Ukraine to account for the new economic realities and political landscape. The program was adjusted to provide more substantial financial assistance and address the unique challenges faced by the new government.

In view of the above, there is no reason why former president John Mahama cannot renegotiate the current deal with the IMF, in fact, he can renegotiate it to soften the current economic hardships in the country if he is elected.

John Mahama has the experience, expertise and the ability to navigate economic realities and secure cooperation of the IMF if elected. The new Mahama administration will be able to provide a robust economic justification, ensure that the proposed policies align with IMF goals and secure public support for the new strategy.