PREVIEW
Tax cuts, an easing of the debt burden and promises of anti-corruption probes fire up the president’s base
It was the depth of Ghana’s economic crisis that swept John Dramani Mahama and the National Democratic Congress to such a decisive victory in the presidential and parliamentary elections in December (AC Vol 65 No 25, Mahama lacks time to turn his promised reset into reality). It also forced Mahama’s hand on some of the early post-election promises as his Finance Minister Cassiel Ato Forson made some difficult trade-offs on tax and borrowing (AC Vol 66 No 6, Can Forson’s budget reset the economy?).
But just after Mahama marked a sombre first 100 days in power, for his second term, signs were emerging of an economic rebound. In April, Forson and his team reached agreement with the IMF, after some policy tweaks, on the fourth review of Ghana’s US$3 billion IMF restructuring loan. For the markets, a more powerful endorsement came from S&P Global Ratings, which upgraded Ghana’s outlook to CCC or ‘stable’ from its slump to ‘selective default’ in 2022. This is far from investment grade but it shows indicators moving in the right direction and will cut the cost of borrowing.
The other positive assessment in mid-May came from analysts at Barclays Bank, who estimated that Ghana’s debt to GDP ratio had fallen to around 54% in January from 61.8% a month earlier. That achievement can be claimed by the outgoing government of President Nana Addo Dankwa Akufo-Addo, which handed over power on 7 January. But the Barclays analysts went on to commend Mahama’s plans to boost growth: they forecast GDP this year would grow to 1.4 trillion cedis ($109bn), up from 1.2trn cedis last year. They also saw the plans to cut the budget deficit to 3.1% of GDP from 7.9% last year as credible.
But bankers in Accra offered some caveats: they point to other positive analyst reports as clearing the way for more borrowing, sometimes with less concern about sustainability. Much will depend, they added, on Mahama government’s spending discipline, which broke down badly in his first term.
New energy
Bearing these broadly positive reviews, Mahama talked up Ghana’s potential for diversified energy projects – both renewables and oil and gas – at the Africa CEO Forum in Abidjan on 13 May. After five years of declining oil production, hindered by legal disputes, Ghana was ready to open the taps and boost oil production, he said. It was also looking for investors for new gas to power projects. Italy’s ENI which had been locked in contractual disputes with the previous government, is back in Accra preparing bids for new oil blocks.
President Mahama has received widespread praise back home. Some civic groups have been praising his promised abolition of ‘draconian taxes’. On 2 April, he signed laws abolishing the electronic transactions levy (E-Levy), betting tax, and emissions tax (AC Vol 63 No 5, Activists rally against E-Levy as government launches consultations). Introduced in 2022 by the New Patriotic Party (NPP), the unpopular 1% E-Levy on electronic transactions was pushed by former Finance Minister Ken Ofori-Atta to generate revenue. That was just prior to the debt default and the financial crisis that compelled Akufo-Addo’s government to seek IMF support.
More positive assessments from the ratings agencies and banks are contingent on the government finding other sources of revenue and stoking faster GDP growth. Data from the Chartered Institute of Taxation shows the E-Levy generated 1.83bn cedis ($117.85 million) in 2022–2023 and 5.2bn cedis in 2024. Scrapping the levy could cost the National Democratic Congress (NDC) government an estimated 6.37bn cedis in 2025. Civic leaders support its removal, arguing it distorted digital sector behaviour. GSMA Intelligence estimates the E-Levy cost the government 1.4bn cedis in 2022. With high living costs, unemployment, and the lingering effects of the NPP-era financial crisis, many Ghanaians welcome the recent cuts as relief.
Vice-President of IMANI Africa Bright Simons told Africa Confidential that while income taxes remain unchanged, ‘Targeted reductions in counter-productive consumption taxes can be growth-enhancing and in the medium term, even boost public revenue a notch.’
Having inherited a heavily indebted economy, Mahama says he will prioritise fiscal responsibility. He has taken some radical steps to cut government spending, and address external debt obligations (AC Vol 66 No 5, Mahama’s government goes private).
Simons said, ‘President Mahama has promised to invest the bulk of his energies on the boring drudgery that is expanding the scope of Ghana’s real economy.’ This, says Simons, will mean less flashy policies and more heavy lifting. Even Mahama’s flagship 24-Hour Economy initiative has been stepped down a notch. In the short term, he is shifting the emphasis to developing the value chain in agriculture and some manufacturing industries: that means boosting production, transport, processing, marketing and exports. If Mahama can stay the course on these sectors over the next two years at least, Simons argues that ‘the aggregate effect could make his term one that Ghanaians look fondly back on many years hence’.
More contentious is the administration’s slow response on corruption. Over 100 days in power, Mahama’s pledge to probe claimed scandals – misappropriated Covid-19 funds, the Agyapa gold deal, and the 25bn cedi ($1.7bn) banking collapse – remains unfulfilled. In February, Mahama tasked new Attorney-General Dominic Ayine with investigating cases flagged by the Operations Recover All Loot (ORAL) Committee (AC Vol 66 No 1, Mahama may struggle to walk the talk). Yet no prosecutions have begun.
Claims of financial malfeasance by NPP officials continue to surface. In March, former Director-General of the National Signals Bureau Kwabena Adu-Boahene was arrested over a cyber defence contract. The $7m deal with Israeli firm RLC Holdings, signed on 30 January, aimed to bolster Ghana’s cybersecurity. A week later, Adu-Boahene was accused of transferring 27.1m cedis from the NSB’s account to his private company, claiming it was payment for the software.
Threats
Illegal small-scale mining, ‘galamsey’, continues to devastate the environment, agriculture, and water sources (AC Vol 65 No 21, The gold rush that poisons politics, Vol 65 No 25, Mahama lacks time to turn his promised reset into reality & Dispatches 21/1/25, An early challenge for President Mahama). The government is under pressure from all quarters for an inadequate response as security agencies fail to enforce regulatory controls, and politicians of all parties are accused of profiting from the illegal and destructive operations. But the incentives are ballooning, with international gold prices at over $3,500 an ounce, and Ghana is back as Africa’s top producer – though its public finances see little benefit from the clandestine production and trading.
On 4 April, Interior Minister Muntaka Mubarak announced the deportation of 107 foreign nationals involved in galamsey, a decision that has sparked debate. Civil society leaders, including Stephen Kwaku Asare of the Ghana Center for Democratic Development (CDD-Ghana), argue that deportation alone is ineffective, calling instead for criminal prosecution.
A report from the Washington-based Center for Strategic and International Studies warns of escalating jihadist activity in northern Ghana, where Al Qaida-linked fighters have been sighted. Security forces are preparing for extended clashes with the fighters. Amadou Koufa of Jama’at Nusrat al-Islam wal-Muslimin has identified Ghana as a target, raising concerns that the country could be drawn deeper into the Sahel conflict blighting Mali, Burkina Faso and Niger, according to the CSIS. That is why Mahama’s envoy to the Sahel, Larry Gbevelo-Lartey, is trying to restore security cooperation with the junta states despite their breaking ranks with the regional grouping, Economic Community of West African States (Ecowas).
Constitutional review
In February, Mahama launched a constitutional reform process to address democratic deficits in Ghana’s Constitution. An eight-member committee, chaired by Kwasi Prempeh of CDD-Ghana, is tasked with proposing amendments by mid-2025, focusing on limiting executive power, enhancing judicial independence, and promoting decentralisation.
The swift launch of reforms after Mahama’s inauguration and the committee’s short timeline may expedite proposals, enabling formal debate and potential approval. Constitutional amendments face significant hurdles. Changing the key provisions – such as executive power, parliamentary oversight (requiring most ministers to be MPs), judicial independence (no limit on the number of Supreme Court judges), decentralisation, and governance of state-owned enterprises – requires a referendum with 40% turnout and 75% approval. Achieving broad political and public consensus is critical.
Lengthy inter-party dialogue, mobilisation, and winning support from civil society and traditional leaders could delay progress after the committee’s recommendations. Time is of the essence as bipartisan and public support may wane closer to the 2028 elections.
Provisions not requiring a referendum are likely to pass with the NDC’s near super-majority in parliament but success is not guaranteed. Secret ballot voting could weaken party discipline, making it harder to secure consistent support. Because of these challenges, reforms may be more limited than advocates anticipate. Even if passed, the process may yield incremental changes rather than a fully revamped constitution.
THE POLITICAL FIGHT REACHES THE JUDGES
The hearings on three petitions claiming serial misconduct and calling for the removal of Chief Justice Gertrude Sackey Torkornoo from office were due to open in Accra on 15 May. The proceedings – the first time a Chief Justice has had to answer such petitions – are breaking new ground in Ghana and in the battle for judicial independence.
Her suspension by President John Dramani Mahama on 22 April, two weeks after she had responded to the charges in the petitions, was lambasted by supporters of the opposition New Patriotic Party (NPP). They organised demonstrations in her defence in Accra on 5 May, demanding that she be reinstated immediately.
She was a close ally of former President Nana Addo Dankwa Akufo-Addo. Her other big supporters in the NPP include former Attorney-General Godfred Dame and Vincent Ekow Assafuah, the MP for Old Tafo in the Ashanti Region, who tried to have Mahama’s handling of Torkornoo’s case declared unconstitutional.
Details of the allegations against Justice Torkornoo and her responses have not been disclosed. We hear some of the petitions are based on an audit report alleging she used public funds to finance lavish overseas trips with her spouse and daughter – actions which contravene the Ghana Judicial Service’s foreign travel policy. That, according to state officials, was why President Mahama deemed the accusations sufficiently serious to warrant her suspension.
Former President Akufo-Addo dismissed a similar petition against Justice Torkornoo on the eve of Mahama’s inauguration on 7 January. Under Ghana’s Constitution, removing the Chief Justice requires the president to determine that there is a prima facie case. If confirmed, a committee, comprising two Supreme Court justices and three other people, is formed to investigate and advise the president.
Currently, only two of the 15 Supreme Court judges were appointed by a president other than Akufo-Addo. Combined with several politically charged rulings unfavourable to the National Democratic Congress, this has prompted accusations of anti-NDC bias in the judiciary, particularly against the Chief Justice, who selects judicial panels for cases.
The panel hearing the case against the suspended Chief Justice includes: Justices Henrietta Mensa-Bonsu, Ernest Yao Gaewu, Richard Adjei-Frimpong, Samuel Kwame Adibu-Asiedu, and Yaw Darko Asare – each of whom was empanelled by the Chief Justice, in line with conventional practice. But some legal scholars argue that this undermines the Supreme Court judges’ independence.
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ON PLANET MAHAMA
Many of the key figures in President John Dramani Mahama’s first term are back at the helm of national affairs. They include:
Ibrahim Mahama, businessman and brother of the president, is a key financier of political campaigns and wields much influence. He is the founder of Engineers and Planners, a leading West African mining company.
Cassiel Ato Baah Forson, Finance Minister and former Majority Leader, is a prominent National Democratic Congress (NDC) MP for Ajumako Enyan Essiam in the Central Region. He leads on economic strategy, including the budget, fiscal policy, and longer-term goals. Forson’s decisions impact national growth, debt management, and international financial relations.
Mahama Ayariga, Majority Leader and long-serving MP for Bawku Central in the Upper East Region, pushes Mahama’s agenda through parliament. His ability to manage and organise proceedings galvanises support for the NDC. Ayariga will be key to steering draft constitutional amendments through parliament once the Constitutional Review Committee submits its recommendations.
Julius Debrah, Chief of Staff and close ally of the president, was central to the NDC’s 2024 election strategy. As Chief of Staff, he coordinates between the presidency and institutions such as parliament, the judiciary, and local authorities. He manages all these relations and tries to shape legislative and administrative policies.
Dominic Ayine, Attorney-General and MP for Bolgatanga East Constituency in the Upper East Region, led the selection of the Constitutional Review Committee. The success of Mahama’s Operation Recover All Loot and the prosecution of former officials will rely on Ayine’s legal expertise, alongside his Deputy, Justice Srem-Sai. Ayine will also help to steer draft constitutional amendments through parliament once the committee presents its report.
Muntaka Mubarak, Interior Minister and long-serving MP for Asawase in the Ashanti Region, oversees national security and internal order, including policing, immigration, and disaster management. He is meant to address the galamsey crisis, despite the NDC’s lack of a clear strategy on the issue.
Edward Omane Boamah, Defence Minister, is central to national security and military strategy. He oversees the armed forces and works with the intelligence organisations, and addresses security challenges and international relations.
Joyce Bawa Mogtari, Presidential Advisor and Special Aide to Mahama, holds no official cabinet position but is in his inner circle. She plays a significant role in managing the president’s public relations.
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