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Russia-Ukraine war: Ghana resolves to ‘engage’ IMF over economic crisis

Russia-Ukraine war: Ghana resolves to ‘engage’ IMF over economic crisis
July 01
18:25 2022

The government of Ghana says it will begin talks with the International Monetary Fund (IMF) to support its economic programmes as part of efforts to hasten the country’s recovery from challenges caused by the pandemic.

In a statement by the ministry of information, President Nana Addo Dankwa Akufo-Addo asked Ken Ofori-Atta, finance minister, to commence formal engagements with IMF in view of securing support to address economic woes in the country.

The decision comes after Ghanaians mounted pressure on the government to address the challenges.

“The President of the Republic, Nana Addo Dankwa Akufo-Addo, has authorized finance minister, Ken Ofori-Atta, to commence formal engagements with the International Monetary Fund (IMF), inviting the fund to support an economic program put together by the Government of Ghana,” the statement reads.

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“This follows a telephone conversation between the president and the IMF managing director, Miss. Kristalina Georgieva, conveying Ghana’s decision to engage with the fund.

“At a meeting on June 30th, 2022, cabinet indicated its support for the decision.

“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.”

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Ghana has been facing an economic crisis worsened by Covid-19 and the war in Ukraine.

Frustration has grown in recent months as Ghanaians bear the brunt of rampant inflation amid government efforts to redress the economy, reappreciate the local currency and avoid a debt crisis.

On Monday, hundreds of citizens had taken to the streets to demonstrate against price hikes, a tax on electronic payments, and other levies amid an economic downturn.

The protest lasted till Tuesday.

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Ghana, one of West Africa’s largest economies and the continent’s second-biggest gold producer, posted a slow growth of 3.3 percent year on year in the first quarter of 2022 and inflation hit a record of 27.6 percent in May.

Meanwhile, the latest announcment to seek support comes after the government had repeatedly said it would not seek 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 has also generated reactions from Ghanaians who took social media to express their feelings about the further devaluation of the country’s currency.

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A Twitter user, Waheed Alabede – Gaskiya Tafi Kobo, said the resolve meant Ghana would not be able to meet its financial commitments for international trade without IMF’s intervention.

“This letter is telling us that Ghana won’t be able to meet the financial obligations for international trade without the IMF- Low supply of forex. Put differently, Ghana is asking the IMF to do for the cedis what the CBN in Nigeria has been doing for the naira to keep the cedis stable,” he said.

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“The expectation is that the cedis may depreciate further at a much faster pace should IMF not intervene quickly.”

A Ghanaian journalist, known as Sekumba, said citizens are not happy with the decision to go to IMF.

“No one is happy about Ghana going to IMF. Government bastardised the institution to score a political point against the past government and tagged it incompetent. Yet ended up making an absolute mess of the economy. Also, they had an opportunity to extend the programme and chose to exit.”

 

Mohammed Adamu Ramadan, a Ghanaian politician said, “we told them that the E-Levy was not the panacea to all our economic problems but they refused to listen to us. According to this document, Ghana is going back to the IMF with her own home-grown programme.”

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