Unprecedented global challenges pushed us back to IMF – Ofori-Atta

BY: Maxwell Akalaare Adombila
Ken Ofori-Atta, Finance Minister

The Minister of Finance, Mr Ken Ofori-Atta, has called on Ghanaians to rally behind the government as it seeks the support of the International Monetary Fund (IMF) to address the unprecedented challenges facing the economy.

The minister said but for the COVID-19 challenges and the Russia-Ukraine crisis, the economy would have continued on a sound footing, with no need for an IMF support.

Mr Ofori-Atta said the government has the track record to navigating challenges and the current situation would not be an exception.

He was addressing Parliament when he appeared to present the 2022 mid year budget review.

His sixth in the row, the mid year review at a time when the government is in the first stages of discussion with the IMF for the country’s 18th economic support pogramme.

The uturn

The minister said the uturn to the fund in spite of various commitments to the contrary followed the unprecedented challenges that tehe conomy was immersed in.

“Yes, I know this the government assured the nation of a Ghana beyond Aid and our plans and programmes for economic transformation have been designed to achieve just that, and indeed, I did say that Ghana would not embark on an IMF programme. 

“We did not just say it,” he told the boisterous Members of Parliament (MPs) led by the Speaker, Mr Alban Bagbin.

“We also took measures towards the attainment of that objective, including the passage of the Fiscal Responsibility Act and instituting a number of irreversibility measures, and also launching the Ghana CARES “Obaatan Pa” programme for economic revitalisation and transformation.

“Unfortunately, unprecedented global developments over the past two years, especially in these last six months, have really and truly disrupted our efforts,” he said.

Global challenges

He explained that the challenges were not unique only to Ghana, but global with various governments making similar uturns.

“Governments across the world have had to change course to tackle the current crisis. Governments that less than a year ago were busily talking about energy transition and green and cleaner fuels have gone back to firing their coal plants.

“Governments that are known for low taxes are now raising taxes to tackle growing deficits.

These are not ordinary times; not for Ghana, not for Africa, and certainly not for the whole world,” he said.

“Right Hon. Speaker, let us all acknowledge that the situation we are experiencing now is different. The global context we find ourselves in is the first of its magnitude in the Fourth Republic and even before that.

“It is, therefore, disheartening when people want to pretend that these developments are purely domestic,” he said. 

Govt, IMF partnership

He noted that it was trite knowledge that global developments, including the impact of the COVID pandemic and the Russia /Ukraine war, have really undermined and disrupted most economies.

According to him, governments across the globe are facing strikes and demonstrations, as workers see their standards of living plummeting with prices of goods and services jumping to heights not seen in over two generations.

He said the government was now working with the IMF to develop its Enhanced Domestic Programme that could be supported by the fund.