Adnan Adams Mohammed
Government says it remains hesitant to seek a bailout from the International Monetary Fund (IMF) in the midst of suggestions from renowned finance experts, and economists, as the economy faces imminent collapse.
The Finance Minister indicates that, government will consider home-grown solutions to deal with the difficulties because the country has what it takes to turn its ailing economy around.
The severity of Ghana’s economic woes was magnified when Fitch ratings, in January 2022 downgraded Ghana’s economy from B to B- with a negative outlook. Moody’s, also downgraded Ghana’s economy from B3 with a negative outlook to Caa1 with a stable outlook. The new ratings, they say, reflect Ghana’s challenges in fixing its liquidity and debt challenges. With limited access to the international financial market, Ghana, for instance, is turning to domestic revenue mobilization to rescue the situation.
Base on these, some analysts proposed seeking an IMF bailout as a better alternative amidst wide public disapproval for the E-levy, but the government has indicated on different platforms that it does not want to seek assistance from the IMF. But, the government believes that, the most prudent measure in the face of Ghana’s ailing economy is not to go back to the IMF but rather rely on the E-levy to raise revenue domestically.
“I can say; we are not going to the IMF. Whatever we do, we are not”, Ken Ofori-Atta posited when speaking at the third in a series of town hall meetings organised in the Northern Regional Capital of Tamale on the controversial Electronic Transaction Levy (E-Levy). “Consequences are dire, we are a proud nation, we have the resources, we have the capacity. We are not people of short-sight, but we have to move on. So let’s think of who we are as strong proud people, the shining star of Africa, and we have the capacity to do whatever we want to do if we speak one language and ensure that we share the burden in the issues ahead.”
Currently, the national conversation has been around the government pushing through the controversial 1.75% electronic transaction levy estimated to rake in some $1 billion annually or going onto an IMF program.
Some analysts have proposed seeking an IMF bailout as a better alternative amidst public disapproval of the E-levy, but the government has said it will have none of that.
Others have also brushed off calls for the government to go under an IMF programme insisting that the options left for Ghana to consider are fiscal discipline, a reduction in wasteful expenditure, and the sealing of revenue leakages.
Meanwhile, the International Monetary Fund (IMF), has stated that it is ready to support Ghana in any way deemed useful by the country’s leaders amidst the economic challenges.
It says Ghanaian authorities have not contacted it for any form of assistance yet.
In a statement published on Twitter by IMF’s Ghana country representative, Dr. Touna Mama, the IMF said Ghana’s current economic woes stem from its fiscal and debt situation.
“Right now, Ghana’s challenges stem from the fiscal and debt situation and less from the economic recovery,” it said.