Ghana decides to “engage” the IMF in the face of the economic crisis
The Government of Ghana has announced that it will enter into talks with the International Monetary Fund (IMF) to support its economic programs as part of efforts to accelerate the country’s recovery from the challenges caused by the pandemic.
In a statement by the Ministry of Information, President Nana Addo Dankwa Akufo-Addo asked Ken Ofori-Atta, Minister of Finance, to enter into formal engagements with the IMF with a view to obtaining support to solve the economic problems of the country.
The decision comes after Ghanaians pressured the government to meet the challenges.
“The President of the Republic, Nana Addo Dankwa Akufo-Addo, has authorized the Minister of Finance, Ken Ofori-Atta, to enter into formal commitments with the International Monetary Fund (IMF), inviting the fund to support an economic program drawn up by the Government of Ghana,” the statement read.
“This follows a telephone conversation between the President and the Managing Director of the IMF, Miss Kristalina Georgieva, conveying Ghana’s decision to engage with the fund.
“At a meeting on June 30, 2022, the cabinet indicated its support for the decision.
“Engagement with the IMF will aim to provide balance of payments support as part of a broader effort to accelerate Ghana’s reconstruction in the face of challenges induced by the Covid-19 pandemic and, recently, the crises Russian-Ukrainian”.
Ghana is facing an economic crisis aggravated by Covid-19 and the war in Ukraine.
Frustration has grown in recent months as Ghanaians bear the brunt of runaway inflation amid government efforts to revive the economy, re-appreciate the local currency and avert a debt crisis.
On Monday, hundreds of citizens took to the streets to demonstrate against price hikes, a tax on electronic payments and other levies amid an economic downturn.
The protest lasted until Tuesday.
Ghana, one of West Africa’s largest economies and the continent’s second-largest gold producer, recorded slow growth of 3.3% year-on-year in the first quarter of 2022 and inflation reached a record 27.6% in May.
Meanwhile, the latest announcement to request support comes after the government repeatedly said it would not request a monetary program from the IMF.
It plans to borrow $1 billion from commercial and multilateral lenders by mid-July, Ofori-Atta had told Bloomberg in May.
The announcement also drew reactions from Ghanaians who took to social media to express their feelings over the continued devaluation of the country’s currency.
Twitter user Waheed Alabede – Gaskiya Tafi Kobo said the resolution meant that Ghana would not be able to meet its financial commitments for international trade without IMF intervention.
“This letter tells us that Ghana will not be able to meet financial obligations for international trade without the IMF – Low supply of foreign exchange. In other words, Ghana is asking the IMF to do for the cedis what the CBN in Nigeria did for the naira to keep the cedis stable,” he said.
“The cedis is expected to depreciate further at a much faster rate if the IMF does not intervene soon.”
This letter tells us that Ghana will not be able to meet financial obligations for international trade without the IMF – Weak supply of FOREX. In other words, 🇬🇭 asks the IMF to do for the cedis what the CBN of 🇳🇬 did for the naira to maintain the stability of the cedis pic.twitter.com/FxxatYobmw
– Waheed Alabede – Gaskiya Tafi Kobo (@wFalabede) July 1, 2022
A Ghanaian journalist, known as Sekumba, said citizens were not happy with the decision to go to the IMF.
“Nobody is happy that Ghana is going to the IMF. The government bastardized the institution to score a political point against the former government and labeled it incompetent. Yet ended up making an absolute mess of the economy. In addition, they were given the option of extending the program and opted out. »
Nobody is happy that Ghana is surrendering to the IMF. The government bastardized the institution to score a political point against the former government and labeled it incompetent. Yet ended up making an absolute mess of the economy. They also had the opportunity to extend the program and opted out.
— B. by Sekumba (@Bridget_Otoo) July 1, 2022
Mohammed Adamu Ramadan, a Ghanaian politician, said: “wWe told them that the E-Levy was not the panacea for all our economic problems, but they refused to listen to us. According to this document, Ghana returns to the IMF with its own local program.
We told them that the E-Levy was not the panacea for all our economic problems but they refused to listen to us. According to this document, Ghana returns to the IMF with its own local program. pic.twitter.com/ifWj2eUwg6
— Mohammed Adamu Ramadan, MP (@AdamuRamadan) July 1, 2022