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Intervention by Otumfuo paved the way for IMF’s $918 million deal – John Mahama

On 3 April 2015, after Otumfuo lent his support to the proposal, the executive board of the International Monetary Fund (IMF) approved a $918 million three-year bailout for Ghana

The former president John Dramani Mahama has credited the intervention of the Asantehene, Otumfuo Osei Tutu II, with swinging the balance in Ghana’s favour in 2015, when his government sought a $918 million extended credit facility (ECF) from the International Monetary Fund (IMF).

On 3 April 2015, the IMF’s executive board approved the $918 million, three-year bailout for Ghana to support the Mahama government’s medium-term economic reform programme.

The government was facing a crisis with the economy. The programme was aimed at restoring debt sustainability and macroeconomic stability to foster a return to high growth and job creation while protecting social spending.

The former president said that, but for the intervention of Otumfuo, his government would have had difficulty in securing the IMF deal.

He made this disclosure as he received the Otumfuo Commemorative Gold Coin at his office in Accra on 8 February 2022.

Bypassing IMF delays

Shedding more light on the assertion, Mahama said when his government was faced with the economic crisis of 2013/14, the Asantehene was at hand to rescue the situation.

“We had implemented the single spine salary policy from President Mills’s time, and somewhere in 2013 the arrears were kicking in. So, we overshot in terms of revenue, which became a burden on the Budget.

“Wages and salaries shot up astronomically, so we did the Senchi Forum, and after that we came out with the ‘Home-Grown Fiscal Consolidation Programme’.

“My government tried to implement the ‘Home-Grown Fiscal Consolidation Programme’ but international investors thought that without discipline we could not do that. We tried to convince them but they would not budge,” he recalled.

“The government, therefore, decided that, to get the credibility, it needed to go to the IMF to buy in to the implementation of the home-grown fiscal programme. However, when the administration wanted to talk to the IMF they kept delaying,” Mahama said.

“One day during a visit to Kumasi, I enquired from Otumfuo whether he could get his friend the president of the World Bank at the time, James D Wolfensohn, for him to work on the IMF programme for the government, and the Asantehene readily accepted the request.

“Because of that programme, Otumfuo flew to Washington, DC to have talks with Mr Wolfensohn, who together with Otumfuo went and spoke with the IMF director, Madame Christine Lagarde, and within a short period we had the extended credit facility.

“That was the programme that turned the economy around because, under that programme, in 2016, almost for the first time in our history, we did not overspend the Budget,” the former president said.

Peacemaker

Mahama also said Otumfuo was a prime mover in the settlement of the Dagbon crisis.

“We are proud of him and we are happy that this coin has been issued,” the former president said.

“Certainly, if anybody were to be celebrated in this country, you couldn’t go past the Asantehene, Otumfuo Osei Tutu II.

“He has been a part of consolidating our democracy since the time of President Rawlings,” Mahama said.

The E ON 3 Group and its key partners presented the gold coin to the former president. The executive chairman of the E ON 3 Group, Richard Adjei Mensah Ofori-Atta, led the delegation to make the presentation.

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