The Government will formally commence negotiations with the International Monetary Fund (IMF) this week as the first step in the country’s bid to secure a bailout from the Fund.
A team from the IMF are expected to arrive in the country this week to collect and assess the country’s economic data to guide the negotiations.
President Nana Addo Dankwa Akufo-Addo will chair the taskforce that would go into the engagements, and has tasked the Finance Minister, Ken Ofori-Atta and his team, to lead the first round of negotiations.
These were made known by Mr Kojo Oppong Nkrumah, the Minister of Information, in a television interview in Accra on Sunday night, July 3, 2022.
The Minister said the President would address the nation on Ghana’s engagements with the IMF in due course.
The Government announced on Friday, July 1, 2022, its decision to commence formal engagements with the IMF, inviting the Fund to support an economic programme put together by the Government of Ghana.
This was after the President had a telephone conversation with the IMF Managing Director, Miss Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund.
The Government explained that the engagement “will seek to provide balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia-Ukraine crises.”
Mr Nkrumah said it was early to determine which programme the country would settle on ahead of the negotiations but assured that the Government would settle for a deal that would best serve the interest of the country.
Responding to concerns that the IMF may impose some conditionalities that could affect the population, particularly workers, the Minister said the Government would assess all available models as it headed into the negotiations this week.
“What I can tell you is that the IMF is not a fun of subsidies of any kind and you will have to make a very good case to hold onto any subsidy you will have in your fiscal framework already.
“So, it will be some sort of difficult conversations there but tough times call for tough people,” he said.
Mr Nkrumah said it was not late for the Government to seek support from the IMF as suggested by some analysts, saying the country had now exhausted its buffers and reserves, necessitating the intervention.
He said the IMF “is not a single bullet to our challenges,” and emphasised the need for the country to boost its domestic resource to check the reliance on debts.
“There is no way to deal with debt sustainability if you are not raising more domestic resources. We need to increase domestic resources to sustain our debt,” the Minister said.
“I can tell you in confidence that we are in excess of our deficit already by about 6 billion,” he added.
Ghana is going for an IMF programme for the second time in seven years after the Government in 2015 went to the Fund to salvage the economy from hardship.
The country’s economy grew by 3.3 per cent in the first quarter of 2022 compared to the same period in 2021, and inflation surged to a record of 27.6 per cent in May.
In March this year, the Government announced a raft of measures, including cutting fuel allocation coupons for all government appointees by 50 per cent, to help restore the country’s economy to pre-COVID-19 era.
However, the measures appear not have achieved the desired results in the wake of high debt and a depreciating currency, the cedi.