IMF bailout not ‘panacea’ to our economic crisis – Oppong Nkrumah

The US$3 billion bailout extended credit facility expected from the International Monetary Fund is not the panacea to Ghana’s economic crisis entirely, Information Minister Kojo Oppong Nkrumah has said.

Speaking to journalists at the Meet The Press series on Wednesday, 10 May 2023, Mr Oppong Nkrumah said: “The government of Ghana has had an enhanced programme which has been designed to help us recover from the major shocks we are suffering, and to make that programme effectual, we will need some balance of payments support from the IMF”.

“And that is what we have been working on”, he noted, adding: “All indications suggest to us that we should be bringing that to a closure pretty soon”.

The Ofoase Ayirebi MP pointed out, however, that the balance of payment support expected from the Bretton Woods institution, “is not all the panacea to our economic challenges”.

He said: “We have other programmes to help us to bring back growth, help private sector kicking and get cost of living under control”.

At this year’s May Day celebration, President Nana Akufo-Addo said both the IMF and World Bank have been “very supportive” of Ghana in the country’s quest to clinch a deal with China and the Paris Club, as far as the restructuring of Ghana’s external debt is concerned.

Addressing workers in Bolgatanga, Upper East Region, Mr Akufo-Addo said after achieving a staff-level agreement with the IMF in December 2022 in record time, six months after beginning the negotiations in July 2022, “we have continued to work tirelessly to complete all prior actions required to present Ghana’s Programme to the IMF Executive Board for approval”.

“We have also made substantial progress on the debt exchange programme, as well as on our engagements with bilateral creditors to secure financing assurances required for the IMF Programme. We are assured that the next round of meetings of the Paris Club will result in the formation of an Official Creditor Committee, inclusive of China, and the provision of financing assurances”.

According to him, the support of the IMF and World Bank on this journey has been substantial.

“With the progress made so far, we expect the IMF Board to consider Ghana’s programme for imminent approval after the financing assurances are provided. I thank Organised Labour for the role they have played in this journey, especially their inputs into the preparation of the government’s Post COVID-19 Programme for Economic Growth, which underpins the IMF-supported Programme”, he noted.

“We are very confident that the approval of the IMF Programme will contribute significantly to the revival of confidence required to drive the successful implementation of the Post COVID-19 Programme for Economic Growth and the key structural reforms for economic recovery and sustained inclusive growth”, the president said.

Already, he noted, “the progress we have made in securing the IMF staff-level agreement, in the debt exchange programme, and the implementation of key structural reforms, are yielding benefits. Inflation is decelerating, interest rates on government treasury notes are declining, the depreciation of the cedi is slowing down, and GDP growth for 2022 has performed beyond expectations. With the successful implementation of the Post-COVID-19 Programme for Economic Growth, we expect growth to recover in the medium-term to over five percent (5%)”.

He said: “The medium-term growth will be supported by key interventions to support improvements in the business environment and export competitiveness, promotion of entrepreneurship for private sector development, fast-tracking the implementation of key growth-oriented programmes under the Ghana CARES (Obaatan Pa) Programme, transitioning to a digital economy to boost productivity, tax collection, and the formalisation of the economy, and the strengthening of policies to adapt to and mitigate climate change for inclusive growth”.

“As I have said, on several occasions, Ghana will emerge stronger from this difficult period. I assure you that, by dint of hard work, prudence and creativity, we will turn things around. We will work to help return our economy to the days of high growth rates and make our country, again, the best place to do business and the most attractive destination for investment in West Africa, like we were in March 2020, prior to the onset of COVID-19.

We are confident of a rapid economic recovery, and my government will not relent in this regard. It is a solemn pledge I am making to you, my fellow Ghanaians, and one which I am determined to fulfil”.