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IMF Chief leads team to Accra for meeting Wednesday

BY: Enoch Darfah Frimpong
IMF Chief leads team to Accra for meeting Wednesday
Dr Albert Touna Mama — Resident Representative of the IMF in Ghana

A high-powered team from the International Monetary Fund (IMF) head office in Washington DC will be in Ghana on Tuesday to begin formal discussions for a new economic support programme for the country beginning Wednesday (July 6, 2022).

The government will on Wednesday officially start preliminary negotiations into Ghana’s quest to seek a bailout from the fund.

The team is expected to meet officials of the Ministry of Finance (MoF), the Economic Management Team and the Presidency during its one-week stay in Ghana.

It will consist of senior officials from the head office of the IMF in Washington, DC, United States as well as local staff based in Ghana, Graphic Online has gathered.

Last Thursday, June 30, 2022, Ghana indicated to the IMF its intention to seek Balance of Payment (BoP) support.

President Nana Addo Dankwa Akufo-Addo in a telephone conversation with the IMF Managing Director, Kristalina Georgieva, conveyed Ghana's decision to engage with the Fund.

The IMF Country Office confirmed receipt of the indication and pledged to support Ghana in its 18th programme with the fund.

The IMF works to achieve sustainable growth and prosperity for all of its 190 member countries.

It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being.

In April 2015, Ghana turned to the IMF for a US$918-million loan to support the then ailing currency and help to stabilise the economy.

New move

At a meeting on June 30, 2022, Cabinet indicated its support for the decision to go back to the IMF for support.

President Akufo-Addo then authorised the Finance Minister, Ken Ofori-Atta to commence formal engagements with the IMF, inviting the Fund to support an economic programme put together by the government of Ghana.

"The engagement with the IMF 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," a statement issued by the Minister of Information, Kojo Oppong Nkrumah announcing the new move said.

Ghana heads back to the IMF just over three years after exiting the programme in December 2018.

Ghanaians in recent months have been feeling the pinch of record inflation and the impact of the Russia-Ukraine war amid cuts in government spending to avoid a full-blown debt crisis.

State of economy

Ghana's economy grew by 3.3% in quarter one of 2022 compared to the same period in 2021 and inflation surged to a record of 27.6% in May.

This was despite the implementation of a raft of measures targeted at ensuring the achievement of the fiscal deficit target of 7.4% of GDP in 2022.

The country is also grappling with high debt and a depreciating currency, the cedi. A controversial tax on Electronic transactions (E-Levy) approved in April and presented as a solution for the economic challenges has also not generated expected revenues.

Ghana at IMF

In April 2015, the country turned to the IMF for a $918-million loan to support its ailing currency and help stabilise the economy.

IMF advisors, working with the government, developed a three-part programme to restore debt sustainability, strengthen monetary policy and clean up the banking system.

Ghana exited the IMF programme in December 2018, and during the 2019 budget presentation to Parliament, the Minister of Finance, Ken Ofori-Atta, had assured the country that the government would back the IMF reforms with legal and institutional measures to ensure the irreversibility of the gains made so far.

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