Ghana will, for the second time, hold a series of meetings with representatives of the International Monetary Fund (IMF) as the country seeks for a loan facility to help it navigate through the current economic hardship.
Led by Stéphane Roudet, Mission Chief for Ghana, the team would be in Accra from September 26 – October 7 to continue discussions with the Ghanaian authorities on policies and reforms that could be supported by an IMF lending arrangement.
The Fund announced on Sunday that it would further engage with other stakeholders during the visit on the same issue.
An IMF staff team led by Carlo Sdralevich visited Accra between July 6 and 13, 2022, to assess the current economic situation and discuss the broad lines of the Government’s Enhanced Domestic Programme.
The engagement between Ghana and the IMF is expected to be completed in about six to seven months.
Ghana is eligible for a credit facility of up to $3 billion under the IMF’s extended credit facility (ECF) and extended fund facility (EFF).
When the IMF team first visited Ghana, they concluded that: “Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment.”
It noted that the West African country with a population of 32 million and the world’s second largest cocoa producer had its fiscal and debt situation severely worsened following the COVID-19 pandemic.
At the same time, investors’ concerns had triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.
The Fund identified policy priorities in the near term, with a focus on improving fiscal balances sustainably while protecting the vulnerable and poor.
Again, the IMF said it would work together with Ghanaian authorities to ensure credibility of the monetary policy and exchange rate regimes, preserve financial sector stability, design reforms to enhance growth, create jobs, and strengthen governance.
The Government, while admitting that times are tough, has encouraged Ghanaians not to give up amid the current economic crunch, but to continue to work hard for a prosperous Ghana.
Mr Ken Ofori-Atta, the Minister of Finance, said the Government had put in place measures to lessen the plight of its citizenry and evidence of growth in the economy was seen in the second quarter Gross Domestic Product (GDP) figure.
He noted that policies, including the homegrown economic programme with the IMF, from which the Government expects to receive a $3 billion loan from the Fund, would help restore confidence in the Ghanaian the economy and make it resilient.
“We’re having an arrangement with the IMF so that we move beyond the dependence on Government and donors into our creative synergies,” the Finance Minister said.
Some economic experts, trade and industry players are of the view that the programme with the IMF would repose confidence and bring the needed stability to the Ghanaian economy.
Nonetheless, they urged the Government to double up efforts and institute and targeted policies that would transform the economy from being primarily import-dependent to a value-addition economy.
“The Finance Minister did admit it and that’s true: the IMF programme will not transform our economy, unfortunately we haven’t heard of so many things new that will structurally change the economy the way he was saying,” Dr Patrick Asuming, an Economist, said.
Mr Kenneth Thompson, the Chief Executive Officer of Dalex Finance, also noted that Ghana needs effective economic management measures rather than seeking bailouts from the International Monetary Fund (IMF).
“IMF is a circus that attracts attention but doesn’t deliver much, but with discipline and dedication we can build our own country without relying on foreign aid,” he said.
Since 1957 Ghana has entered 17 bailout arrangements with the IMF to restore the health of government finances, having existed the last one in April 2019.