CISA’s Sneak Peek into Mahama’s Second Administration

Introduction

Ghanaians have a new president and parliament now. The opposition National Democratic Congress (NDC) led by former President John Mahama, won both the presidential and parliamentary elections held on 7 December 2024. Mr Mahama, according to official results declared by the Electoral Commission from 275 constituencies, had 56.42% while Vice President Mahamudu Bawumia, who led the incumbent New Patriotic Party (NPP), polled 41.75%. The results of one constituency, Ablekuma North, is pending. Out of the 276 seats, the NDC won 183 while the NPP won 88. Four independent candidates were elected to the Ninth Parliament. Mr Mahama has been sworn into office for a second term, which will be his last, per the 1992 Constitution, which imposes a two-term limit on the presidency.

In this editorial, the Centre for Intelligence and Security Analysis (CISA Ghana) takes a look at what Mr Mahama’s second administration has to contend with and how that is likely to shape his second coming.

A mountain of problems to carry

With a new leader and parliament come new ways of running the country for the next four years. Mr Mahama, who has just this term to lead, has an uphill task. He inherits a broken economy, unprecedented debt stock, weak currency, several uncompleted roads and other infrastructural projects, unmitigated illegal mining (galamsey) along with polluted water bodies, and corruption-riddled institutions, among others.

Apart from tackling these inherited burdens,  President Mahama has to also fulfil his campaign promises to “reset” Ghana, including running a 24-hour economy, scrapping several taxes instituted by the Akufo-Addo government, stabilising the cedi, rolling out a $10 billion infrastructure development programme, implementing a no-academic-fee policy for all first-year students in public universities, as well as introducing free tertiary education for people with disabilities, free primary healthcare, free sanitary pads for schoolgirls and the Ghana Medical Care Trust (MahamaCares).

In addition,  President Mahama has also promised to restore the licences of banks that collapsed under the Akufo-Addo administration, reduce food inflation, start a unique pension scheme for non-formal workers, partner tech giants to train one million young coders, industrialise, create farm banks within agricultural zones, undertake several health infrastructure projects across the country, and scrap the payment of ex gratia among many others. In his first 120 days in office, the New president has promised to: 

1. Nominate the complete list of Cabinet Ministers for parliamentary approval within the first 14 days.
2. Constitute the leanest and most efficient government under the Fourth Republic within 90 days.
3. Establish a robust code of conduct for all government officials.
4. Hold a National Economic Dialogue to assess the state of the economy and prepare a home-grown fiscal consolidation program.
5. Scrap taxes such as the E-Levy, COVID levy, 10% betting levy, and emissions levy within 90 days.
6. Review taxes and levies on vehicles and equipment imported for industrial and agricultural purposes.
7. Draft legal amendments for implementing the 24-hour economy policy.
8. Establish An Accelerated Export Development Council to promote exports.
9. Convene a national consultative conference on education.
10. Implement a no-academic-fee policy for first-year students in public tertiary institutions.
11. Launch social interventions like free tertiary education for persons with disabilities and the MahamaCares Fund.
12. Distribute free sanitary pads to female students.
13. Institute forensic audits into several matters of public interest.
14. Ban political appointees from purchasing state assets.
15. Allocate seed money for establishing a Women’s Development Bank.
16. Launch priority job creation programs.
17. Review  laws banning the importation of salvaged vehicles.
18. Propose a new bill to streamline government scholarships.
19. Ban illegal mining activities in forest reserves.
20. Launch the “Black Star Experience” initiative to boost tourism.
21. Investigate unsolved criminal cases.
22. Probe the VRA dam spillage disaster and compensating victims.
23. Shake up loss-making state-owned enterprises.

Starting from the 7th January, 2025, Ghanaians have started  ticking the boxes and waiting patiently to see if Mr Mahama lives up to expectation. It is not going to be an easy  task for the president and his cabinet. In the following section, CISA analysts discussed the impending challenges and how the president can move past them in his quest to reset the country for the present and future generation.

IMF blues & the debt burden

For Mr Mahama to achieve these, he needs a bottomless war chest. The Bank of Ghana, in November 2024, reported Ghana’s total debt stock to be GH¢761.0 billion as of October that year, per the central bank’s Summary of Financial and Economic Data. Also, in October last year, the IMF predicted Ghana’s debt-to-GDP ratio for 2024 to be 82.9%. The country is also under a three-year $3-billion extended credit facility programme with the IMF, which limits and restricts government expenditure and policies. The programme’s main objectives are to “help Ghana restore macroeconomic stability, ensure debt sustainability and promote exclusive growth.”

So far, the IMF has disbursed $1.9 billion to the government of Ghana under the programme, the IMF says on its website. The programme has helped Ghana’s debt restructuring programme and played a role in policy and reform efforts as well as economic growth.

The new administration insists the outgone government has mismanaged the country’s coffers and left it dry to the extent that they have warned of a looming power crisis. However, Mr Akufo-Addo, in his last State of the Nation Address, said he was handing over Ghana with almost $8 billion in gross international reserves, which, he noted, was more than the $6.2 billion gross international reserves his administration inherited in 2017. “Economic growth has also returned to the pre-COVID trajectory, with an impressive growth rate, rising from 4.8 per cent in the first quarter of 2024; seven per cent in the second quarter and 7.2 per cent in the third quarter,” Mr Akufo-Addo emphasised.

A raft of taxes & levies to scrap

To worsen matters, Mr Mahama has promised to scrap, within 100 days of his second presidency, the e-levy, COVID-19 levy, 10% betting levy, emissions levy and import duty on vehicles and equipment imported into the country for industrial and agricultural purposes, all of which he described during his campaign as “draconian taxes.”

Apart from the tax scraps, Mr Mahama also promised to apply the Price Stabilisation and Recovery Levy on fuel to cushion consumers, rationalise fees and charges at the ports to reduce the burden on importers and Ghanaians; and also undertake a comprehensive reform of Ghana’s VAT regime to provide relief for households and businesses.

According to the NDC’s 2024 manifesto, this will include reversing the decoupling of GETFund and NHIL from VAT, reversing the VAT flat rate regime, upwardly adjusting the VAT registration threshold to exempt micro and small businesses, and repealing the law imposing VAT on domestic electricity consumption.

Should Mr Mahama fulfil these tax-scrap promises, he would have effectively deepened the huge hole already bequeathed him in the country’s kitty. His government would have to look for alternative means to raise more money to fill the void.

Could the potential savings to be made from the promised scrapping of ex gratia, as well as the proceeds of corruption that may be recovered from past officials of the Akufo-Addo administration by the Operation Recover All Loot (ORAL) team be enough to plug the fiscal hole to be created by these tax scraps? Or will Mr Mahama resort to borrowing, for which he berated the Akufo-Addo administration, to achieve that aim?

Perhaps, Mr Mahama would leverage his past experience as president, to skirt his way around these tough decisions but he has no choice but to fulfil the promises he made to Ghanaians during the campaign season. Should he renege on his promises, especially those earmarked for the first 100 days of his administration, he would’ve lost the goodwill the citizens have for him and the confidence they have reposed in him.

Walking the galamsey tightrope

On galamsey, Mr Mahama would need to fall on his past experience in crafting a better strategy this time round. Successfully crushing galamsey or streamlining it as a legitimate industry governed by laws to protect the environment, could help the Mahama administration rake in some very much-needed revenue, as the menace costs the country $2.3 billion a year in lost revenue and illegal smuggling (Wilson Center).

Saving $9.2 billion in four years just by successfully fighting galamsey can help the Mahama administration tremendously. That amount is three times more than the $3 billion the country is getting from the IMF in three years.

Fighting galamsey has other positives: it will reduce the cost of water production by the Ghana Water Company Limited, thus, saving more taxpayer money for other purposes. Currently, the Ghana Water Resources Commission estimates that some 60% of the country’s freshwater sources have been polluted by toxins and chemicals from the operations of galamsey. This means a lot of money and other resources are needed to treat the water for use.

Saving water bodies would in turn have a positive impact on the health of citizens, and consequently, reduce the burden on the national health insurance scheme.

Tackling galamsey could also cut the cost of agricultural production since a lot of cocoa and other crop plantations are being decimated through illegal mining. For example, some 100,000 acres of cocoa farms have been destroyed by illegal mining, according to the Mankrom Cocoa Cooperative Farmers Association.

However, the Mahama administration must also be aware of the economic downsides of fighting illegal artisanal and small-scale mining, which Ghana’s Minerals Commission says contributes about $10 billion to the country’s exports as of the end of 2024. Furthermore, artisanal and small-scale mining accounted for an estimated 35% of Ghana’s total gold output in 2020 (Sciencedirect.com) and also supported the livelihoods of 5 million Ghanaians – that is more than 10% of Ghana’s population. Therefore, dealing with galamsey requires a lot of tact.

24-hour economy

Yet still, what most Ghanaians would be expecting to see manifest is Mr Mahama’s flagship campaign promise to run a 24-hour economy. This requires the collaboration of the security, transport, energy, utility and financial sectors. The 24-hour economy plan could potentially provide more jobs to the unemployed youth, thus, reducing joblessness. It also stands the chance of increasing productivity and, consequently, shoring up Ghana’s GDP as well as having a positive knock-on effect on the private sector (banks, financial institutions, mobile money vendors, fintechs, transport operators, among others) with a collateral benefit also, for the road, transport, security and energy sectors.

Like Mr Akufo-Addo’s flagship Free Senior High School policy, which propelled him and his party into office in 2017 after winning the 2016 general election, Mr Mahama and the NDC have no excuse than to deliver on this major promise, and this must be done and implemented competently, effectively and efficiently if his government is to escape flak from the opposition New Patriotic Party (NPP) just as the NDC, while in opposition, criticised the implementation of the Free SHS policy as wishy-washy. 

Internal & external security, terrorism, regional cooperation

Also, while dealing with internal security situations such as the recent fire outbreaks that have been sweeping through market squares in the country, the Bawku conflict as well as other unresolved chieftaincy squabbles, land-guardism and vigilantism among others, Mr Mahama has terrorism and insurgency activities along Ghana’s borders to deal with, especially the situation in the country’s northern neighbour Burkina Faso, which, according to the Global Terrorism Index, is the most terrorised part of the world. With Ghana also being a member of the Economic Community of West African States (ECOWAS), Mr Mahama inherits a fractured regional bloc and, so, must appoint very adept security and international relations experts as well as diplomats with vast experience and understanding of the region’s special needs and sensitivities to be seen as a unifying force between the remaining ECOWAS bloc and the splinter Alliance of Sahel States (AES) made up of Burkina Faso, Niger and Mali – all of which are being led by juntas.

Conclusion

Ghana, the first country in Sub Saharan Africa to gain independence has done incredibly well in terms of smooth transitions since the beginning of the 4th republic. However, what the country is lacking is development to match these peaceful transitions. Just like the song of Osibisa, we  know the road will be muddy and rough for the new president as he has a herculean task to fill the depthless hole in Ghana’s coffers and prove to Ghanaians that he merits this second chance. In order for him to get there, he must be truthful to Ghanaians and be proactive in his negotiations with external powers to ensure that every deal he goes in for  yields the maximum benefits for the ordinary Ghanaians and breaks the cycle of dependency. We at the Centre for Intelligence and Security Analysis (CISA Ghana), wish him the best of luck as he seeks to reset the country.