Ghanaian President, Nana Addo Dankwa Akufo-Addo, has ordered Ken Ofori-Atta, the Finance Minister, to initiate a formal meeting with the International Monetary Fund (IMF), to support the country’s economy. This was a result of the protest by hundreds of Ghanaian citizens
According to the minister of information, Kojo Oppong Nkrumah, the cabinet gave their full support following the conversation over the phone between President Nana Akufo-Addo and IMF Managing Director Kristalina Georgieva.
The Ghana government has renounced its initial decision not to ask for support from the International Monetary Fund despite its falling economy from the global pandemic, inflation, and depreciated currency.
Response from I.M.F.
Confirming Ghana’s request, the spokesman of I.M.F. in a conversation with Reuters says the I.MF. is ready to rescue Ghana from its economic crash and help it restore macroeconomics stability, safeguard debt sustainability, promote inclusive and sustainable growth.
Comparing their economy with that of the previous year, Ghana’s Central bank governor, Ernest Addison said “Ghana is faced with inflation and an overall payment deficit of $934.5 million in the first quarter of 2022, compared with $429.9 million in the same period last year”.
Analysts conclude that the action of the Ghanaian government was inevitable as inflation strikes it down.
From the words of Leslie Dwight Mensah, an Economist and Research Fellow at the Institute for Fiscal Studies in Accra, the first breakthrough for Ghana will be improved International confidence in the country’s ability to tackle its economic crisis.
State of Ghana’s Economy
A report from graphic.com says in the first quarter of 2022, Ghana’s economy grew by 3.3% compared to the same period in 2021, and inflation rose to a record of 27.6% in May.
Due to the struggle with debt and depreciating currency, the Ghanaian government implemented a controversial tax on the electronic transaction levy (E-Levy) to generate revenue for the country and relieve the Ghanaian government of the economic burden. However, its result is yet to be seen.
In response to this, a protest was held for two days over the sudden increase in fuel prices and the state of the country’s economy. A pressure group known as Arise Ghana group demonstrated its anger against the electronic transaction levy (E- Levy). And further said it wants the government to cancel the use of E-Levy.
Ghana’s I.M.F History
Ghana has been receiving I.M.F. support from April 2015. It received the sum of a $918-million loan to support its ailing currency and help stabilize the economy. In view of this, I.M.F. advisors, working with the government, created a three-part programme to restore debt, and strengthen their monetary policy.
In December 2018, Ghana opted out of the I.M.F. programme. This also occurred during the 2019 budget presentation to Parliament. According to the minister of finance, Ken Ofori-Atta, the government will make sure it backs the I.M.F reform with legal measures to ensure the irreversibility of the gains made so far.