Oppong Nkrumah throws light on what next in Ghana-IMF engagements

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Information Minister, Mr Kojo Oppong Nkrumah, has highlighted on what to be expected during the engagement with the International Monetary Fund (IMF).

IMF officials are expected to arrive in Ghana this week to begin negotiations with government officials.

Asked what should be looked out for while speaking in an interview with TV3’s Paa Kwesi Asare, Mr Oppong Nkrumah said “First of all, we, in March put out a programme to mitigate the impact of this second crisis on the Ghanaian. In the last one week, we have been doing a lot of assessment with how well it has worked.

“What has happened after that, we are of the view that we need to have an enhanced economic programme that gives you more than just those specific issues that we had raised. That programme needs to be funded from various sources. You need domestic resources to fund that programme.

“That is why you instruments like the Electronic Transfer Levy , VAT, Property Rate, other things seeking to raise domestic resources to fund that programme. Then you need money from the international capital markets whose access is a bit difficult now because we have been downgraded but we have at least got about a billion dollars in Parliament we are hoping to pass and add to the resources we have to fund the programme to improve the condition of our people.

“Then you are also looking for a concessional facility like what we will be discussing with the Fund to add to that so it is a mix of resources that are coming in to fund our domestic economic programme and we are that we will be successful in that area.”

He added “negotiations are negotiations, we are looking for opportunity to sit with ladies and gentlemen of the Fund, and show them our enhanced domestic progarmme and explain to them why we believe that we need their resourcing in some particular areas to assist us on the balance of payment side which also translates into currency stability , some bit of macro stability that would improve the liquidity for the fiscal as well.”

The Ofoase Ayiebi lawmaker further indicated that the conditions that have compelled the Akufo-Addo administration  to go to the International Monetary Fund (IMF) for support are completely different from the situation that existed previously when Ghana went to the Fund in 2014/15.

He explained that it is not about the domestic economic management rather, it is about an international crisis-induced phenomena that has brought over one hundred countries including Ghana, to a point where their buffers have been eroded and they need to respond.

When asked for his views on claims that critics are taunting the government for running to the Bretton Woods institution due to how the New Patriotic Party (NPP) also behaved when in opposition at the time the John Mahama administration went to the IMF for support, Mr Oppong Nkrumah said “When you a self-induced crisis and then you have to go to the Fund for a balance of payment support programme, then it raises questions about the way you are managing fiscal policy, monetary policy and the broader economy. 

“But this is not a situation in which you have a self-induced crisis. This is a different scenario all together. It is not about your domestic economic management, it is about an international crisis-induced phenomena that has now brought you to a point where your buffers have been eroded and you need to respond.

“That is why for example, from 2020, about half of the world’s countries are applying to the Fund for some support. It is not to say that all of the people who manage all of these over one hundred economies do not know how to go about their jobs  but is it evident of the fact that something external, something exogenous has hit, that is why today, Egypt, Kenya, I understand Tunisia is also applying for some sort of support,  are asking for support.”

Asked again whether the government has been embarrassed by this decision, he answered that “The reasons that have brought us here are quite clear.

“If you look at the performance of Ghana’s economy between 2017 and 2019, yes there were still some structural challenges  in Ghana’s economy but the economy was performing way better based on, particularly, the fiscal and monetary policy measures and the broader economic policy measures that the administration was rolling out.

“The results were that we were doing better , inflation rate was going down  , interest rates were going down , we were having the opportunity to create some more jobs and some more development  programmes in the economy.  In 2020 ,that stopped,  primarily because our economy still with its challenges, was  hit by major external factor, not  just our economy, many economies around the world. In 2021, we started a path to recovery, so you will notice that in 2021 even though we had depleted a good chunk of our buffers and our reserves , we were still now building back better, trying to rebuild our reserves and trying to get our economy back  on track.

“Then, the first part of 2022, I think in February, you had what occurred in the Black Sea area, giving the world another major crisis. Now there is high food prices all over the world , high fuel prices , high cost of financing  and it is biting  Ghanaian a lot.

“Do you have the domestic buffers still  to respond to them?  You don’t.  You are now just trying to recover and rebuild  and so if you look at all your  options, despite the initial  thinking that  you could rebuild those buffers  domestically, the president has decided that it is important we  start engaging with the Fund for the possibility of  getting a balance of payment  support from them. To help us rebuild our buffers  and better mitigate  what is happening around the world  and happening here in Ghana as well.

On Friday July 1 President Akufo-Addo gave instruction to Mr Ofori-Atta to commence the engagements with the IMF following a telephone conversation between the President and the IMF Managing Director, Miss Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund.

The Ministry of Information announced this in a statement.

By Laud Nartey|3news.com|Ghana

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