News Guide Africa

Tag: Institute of Economic Affairs (IEA)

  • “Hands Off GoldFields”: veteran journalist slams IEA ‘populism’ over Tarkwa lease renewal

    “Hands Off GoldFields”: veteran journalist slams IEA ‘populism’ over Tarkwa lease renewal

    By News Desk

    The heated debate over the sovereignty of Ghana’s mineral wealth has taken a sharp turn as Adnan Adams Mohammed, a prominent economic analyst and mining advocate, has launched a scathing defense of Gold Fields Ghana’s lease renewal at Tarkwa.

    Following calls from the Institute of Economic Affairs (IEA) and former Chief Justice Sophia Akuffo to halt the renewal in favor of total state ownership, Mr Adnan Adams Mohammed has warned that such “radical nationalization” rhetoric risks collapsing the nation’s primary economic pillar.

    The “betrayal” of private capital

    The controversy erupted after the IEA formally opposed the renewal of Gold Fields’ Tarkwa mining lease, arguing that the current 90-10 split between the company and the government is a colonial-era vestige that disadvantages the state. However, Mr Adnan Adams has been quick to frame the IEA’s stance as economically reckless.

    “We must move past this populist sentiment that ignores the reality of global capital,” Mr Adnan Adams stated in a series of biting critiques. He pointed to the historical failure of state-run enterprises, referencing the era of the State Gold Mining Corporation (SGMC) which nearly collapsed the sector before privatization in the 1980s.

    “The calls by the IEA and Sophia Akuffo are not just ill-timed; they are dangerous. They are asking the state to take over complex, capital-intensive operations when we are currently struggling to manage basic public utilities. To suggest GoldFields should be pushed out is a betrayal of the investment stability Ghana has spent decades building.”

    Chamber of Mines joins the defence

    The Ghana Chamber of Mines has echoed Mohammed’s sentiments, formally rejecting the IEA’s proposal to nationalize the Tarkwa mine. The Chamber argued that the current model, which combines royalties, corporate taxes, and a 10% carried interest, ensures the state benefits without bearing the massive financial risks of mining.

    “Mining is a high-risk, high-cost venture,” a representative for the Chamber of Mines noted. “The Tarkwa operations are a blueprint for responsible mining in the sub-region. To interrupt a renewal based on ideological theories rather than technical or economic defaults is to tell the world that Ghana is no longer open for business.”

    The Chamber emphasized that Gold Fields has invested billions of dollars into the Tarkwa site, providing thousands of high-paying jobs and supporting local infrastructure benefits that critics often overlook in favor of raw percentage debates.

    The IEA vs. reality

    The IEA’s stance, backed by Sophia Akuffo, suggests that Ghana should follow the examples of countries like Botswana or those in the Middle East, where the state maintains a majority stake in natural resources.

    Adnan Adams Mohammed, however, was quick to dismantle this comparison. “You cannot compare a 100-year-old gold industry with the specific geological and political landscape of Botswana’s diamonds. These are different commodities with different cost structures. When people like Sophia Akuffo speak on this, it feels like the betrayal of Jean Mensah’s era—where decisions are clouded by optics rather than the hard truth of the Cedi.”

    Strategic stability

    The defense of the lease renewal comes at a time when the mining sector is already under pressure from high taxes. For Mohammed, the Gold Fields lease represents more than just one mine; it is a signal to the international market.

    “If we allow the IEA to dictate mining policy through the lens of nationalization, we will see an exodus of investors that will make the departure of Endeavour Mining look like a minor event,” Adnan Adams warned. “Gold Fields has demonstrated loyalty to the Ghanaian economy even during downturns. They deserve a renewal based on their performance, not a rejection based on academic theories.”

    As the government weighs the renewal of the Tarkwa lease, the battle lines are clear: on one side, an academic push for greater state control; on the other, a pragmatic demand for stability led by voices like Adnan Adams Mohammed, who believe that a “Job-First” and “Investment-First” approach is the only way to keep Ghana’s gold sector alive.

     

     

  • Ghana risks 18th IMF bailout without structural reforms – IEA warns

    Ghana risks 18th IMF bailout without structural reforms – IEA warns

    The Institute of Economic Affairs (IEA) has cautioned that Ghana may be forced to return to the International Monetary Fund for an 18th bailout if policymakers fail to address the deep-seated structural weaknesses undermining the economy.

    Board Chairman of the IEA, Dr. Charles Mensa, stressed that unless bold and pragmatic measures are rolled out, the country’s fiscal vulnerabilities will persist, leaving it dependent on repeated external interventions.

    Speaking on the sidelines of a Roundtable Discussion on “The Mining Regime in Ghana,” Dr. Mensa urged the government to leverage natural resource wealth, strengthen domestic revenue mobilization, and build resilience to avoid yet another IMF programme.

    “For the record, we have been to the IMF for the seventeenth time, asking for a bailout, meaning we have gone bankrupt seventeen times. Ghana is one of the largest gold-producing countries in the world, yet with all these resources, we keep going bankrupt. Why is that? It is because we have no control over our natural resources,” he opined.

    “If we don’t own our resources, we will continue to operate under this same model and very soon we will go to the IMF again for the 18th time,” he stressed.

    Ghana first turned to the International Monetary Fund (IMF) in 1966, following the overthrow of President Kwame Nkrumah by the National Liberation Council (NLC).

    The new administration sought assistance from the IMF and World Bank to stabilize the economy, with measures that included supervising the privatization of state-owned enterprises and restructuring them into commercially viable entities.

    Ghana is expected to wrap up its current US$3 billion, three-year IMF Extended Credit Facility in the first quarter of 2026. The programme, launched in 2023, was designed to tackle macroeconomic instability and mounting debt pressures.

    While implementation remains on track, analysts warn that the real test will come after the programme ends when Ghana must demonstrate fiscal discipline, sustain debt management efforts, and avoid slipping back into the cycle of imbalances that triggered repeated IMF interventions.

  • BoG’s can’t be blamed for participating ‘haircut’ – IEA 

     

     

    By Ibrahim Awall

     

    The he Institute of Economic Affairs (IEA) has defended the Bank of Ghana (BoG) against undue blame for its participation in the government’s Domestic Debt Exchange Programme (DDEP), which contributed to the central bank’s financial loss in 2022.

     

    The Director of Research of IEA, Dr John KWAK YEARS, acknowledged the BoG’s responsibility for extending excessive loans to the government, yet he maintained that the central bank cannot be criticised for accepting a “haircut” as part of the DDEP.

     

    In the 2022 fiscal year, the Bank of Ghana reported a substantial loss of GH¢60.8 billion.

     

    Amidst repeated calls from the Minority in Parliament for the resignation of the Governor of the Bank of Ghana, Dr Ernest Addison, and his deputies over perceived recklessness in central bank management, Dr Kwakye elaborated, “As central bankers, financing the government’s deficit is the most inflationary thing to do. That is why the central banks set lending limits to their governments.

     

    “What has happened in our case [BoG] is that it looks like BoG went far beyond the sealing Act of last year’s revenue of 5%.

     

    “We are told that they lent almost GH¢44 billion, and that is the magnitude. Once you do that, you are already getting yourself into serious trouble.”

     

    He said the BoG’s involvement in the DDEP, which qualified Ghana for an IMF programme, the declared GH¢60.8 billion loss, a significant GH¢53.1 billion directly resulted from the DDEP. He emphasized that while fault could be attributed to over-lending to the government, it was essential to acknowledge the compulsion the BoG faced to engage in the DDEP.

     

    “BoG over-lent to government and then you bring in this DDEP which qualifies us for IMF programme. And IMF compels BoG to be part of it. Out of the GH¢60.8 billion loss they have declared, GHC53.1 billion is coming direct from DDEP.

     

    “So the question is will you fault them for that? We can fault them for over-lending to the government that is the problem, but why they were being forced to be part of the DDEP, is also another. That one, you can’t fault them for that”.

     

    Kwakye directed scrutiny towards the IMF, questioning their imposition of the DDEP on the Bank of Ghana in pursuit of a $3 billion bailout.

     

    Furthermore, Kwakye attributed a portion of the responsibility to the government for BoG’s losses, emphasizing their role in creating deficits that necessitate financing.

     

     

     

     

  • Currency Board: IEA calls for a strong legal system

    Adnan Adams Mohammed

     

    The Institute of Economic Affairs (IEA) is calling for a strong legal system to support the proposed Currency Board (CB) Lite System to achieve its goals.

     

    It believes a strong legal system is key to support the board particularly the enforcement of the applicable rules.

     

    The IEA had earlier proposed the establishment of a CB to limit the Central Bank lending to the government, a move it believes will stabilise the cedi and prevent instability in the economy in times of shocks. It is, however, now calling for a Currency Board Lite System to reduce the limitations including possible loss of monetary policy independence and loss of exchange rate flexibility to respond to shocks.

     

    “A strong legal system is key to support the board, particularly the enforcement of the applicable rules. It is essential because a currency board arrangement derives much of its credibility from the changes required in the Central Bank law”, the Institute juxtaposed in a statement issued last week.

     

    “We would want to rather see a Currency Board Lite System for Ghana. This is essential to mitigate some of the disadvantages of a Currency Board. This would rather help in tightening the monetary and fiscal rules as well as enforcement and oversight regimes.”

     

    The institute also said a well-managed financial system is required for the system to be able to stand on its own without the lender of last resort opportunity that is available under a central bank but absent under a currency board.

     

    The ‘Currency Board’, the Institute of Economic Affairs (IEA) believes will help stabilise the cedi and prevent instability in the economy in times of shocks. The Institute also to limit the Central Bank lending to the government

     

    These monetary control and management factors deficiencies have been the bane of Ghana’s economic management. According economists, the CB system has limited inflation, checks currency volatility and better position balance of payments.

     

    “You see, a Currency Board (CB) is a rigid monetary management system that is hedged in strict rules, with little room for discretion. The CB does not lend to government and it covers its currency fully by foreign exchange”, Lead Researcher at the Intitute, Dr. John Kwakye, in a paper published and titled “Institutionalising Fiscal Discipline and Macroeconomic Stability for Sustained Growth in Ghana: The Constitutional Pathway” noted.

     

    “The CB system has limited inflation, the currency does not depreciate and balance of payments crises are rare. This is close to the system in our Francophone neighbours, who restrict their Central Bank lending to governments and provide adequate cover for their currency, the CFA.”

     

    IEA buttressed its points that, the Francophone countries system guarantees them low inflation and a stable currency, but “you have Ghana that has chosen an independent Central Bank to conduct discretionary monetary policy’.

     

    It also blamed the Central Bank of Ghana for some of the economic woes, saying, “The Central Bank provides significant lending to government and covers the cedi with limited foreign exchange (40% in the Act). No doubt we face perennial price and currency instability!”

     

    “It is for this reason that some of us have argued that if we continue to abuse policy discretion and pay a high price for it in terms of macroeconomic instability, then we better hedge our policies by rules; tie our economic managers hands, so that we can enjoy rules-driven macroeconomic stability!”, it added.

     

    Finally, the IEA said despite Ghana having rules such as the Public Financial Management Act, the Bank of Ghana Act and the Fiscal Responsibility Act, the rules have not work because of lack of political way.

     

    “Let me say that it is not that we have had no rules at all in fiscal and monetary management. In fact, I can mention a couple of them, such as the Public Financial Management Act, the Bank of Ghana Act, the Fiscal Responsibility Act and the relevant provisions in the 1992 Constitution, which represent attempts to introduce rules in our fiscal and monetary management system”.

     

    “However, there are serious questions regarding not only their enforcement but their effectiveness as well. And that is the reason we feel strongly about the need to give constitutional backing to some of these rules”, it concluded.

  • ‘Currency Board’ will effectively address monetary management infractions – IEA

    ‘Currency Board’ will effectively address monetary management infractions – IEA

    Adnan Adams Mohammed

     

    As Ghana visage for a way out of its cyclical economic management mess, the government is advised to establish a ‘Currency Board (CB)’ to help in the monetary management process of the Bank of Ghana.

     

    The ‘Currency Board’, the Institute of Economic Affairs (IEA) believes will help stabilise the cedi and prevent instability in the economy in times of shocks. The Institute also to limit the Central Bank lending to the government

     

    These monetary control and management factors deficiencies have been the bane of Ghana’s economic management. According economists, the CB system has limited inflation, checks currency volatility and better position balance of payments.

     

     

     

    is pushing for the establishment of a Currency Board (CB) to limit the Central Bank lending to the government, a move it believes will stabilise the cedi and prevent instability in the economy in times of shocks.

     

    According to the institute, since

     

    “You see, a Currency Board (CB) is a rigid monetary management system that is hedged in strict rules, with little room for discretion. The CB does not lend to government and it covers its currency fully by foreign exchange”, Lead Researcher at the Intitute, Dr. John Kwakye, in a paper published and titled “Institutionalising Fiscal Discipline and Macroeconomic Stability for Sustained Growth in Ghana: The Constitutional Pathway” noted.

     

    “The CB system has limited inflation, the currency does not depreciate and balance of payments crises are rare. This is close to the system in our Francophone neighbours, who restrict their Central Bank lending to governments and provide adequate cover for their currency, the CFA.”

     

    IEA buttressed its points that, the Francophone countries system guarantees them low inflation and a stable currency, but “you have Ghana that has chosen an independent Central Bank to conduct discretionary monetary policy’.

     

    It also blamed the Central Bank of Ghana for some of the economic woes, saying, “The Central Bank provides significant lending to government and covers the cedi with limited foreign exchange (40% in the Act). No doubt we face perennial price and currency instability!”

     

    “It is for this reason that some of us have argued that if we continue to abuse policy discretion and pay a high price for it in terms of macroeconomic instability, then we better hedge our policies by rules; tie our economic managers hands, so that we can enjoy rules-driven macroeconomic stability!”, it added.

     

    Finally, the IEA said despite Ghana having rules such as the Public Financial Management Act, the Bank of Ghana Act and the Fiscal Responsibility Act, the rules have not work because of lack of political way.

     

    “Let me say that it is not that we have had no rules at all in fiscal and monetary management. In fact, I can mention a couple of them, such as the Public Financial Management Act, the Bank of Ghana Act, the Fiscal Responsibility Act and the relevant provisions in the 1992 Constitution, which represent attempts to introduce rules in our fiscal and monetary management system”.

     

    “However, there are serious questions regarding not only their enforcement but their effectiveness as well. And that is the reason we feel strongly about the need to give constitutional backing to some of these rules”, it concluded.

     

  • IEA takes on govt for snubbing fiscal adjustment but pursuing debt restructuring as advised by IMF

    Adnan Adams Mohammed

     

    The Institute of Economic Affairs (IEA) is dismayed at the snobbish attitude of government towards  the fiscal adjustment advice from the International Monetary Fund (IMF) in order to reach a debt sustainability level.

     

    The  government is only focusing its attention on the debt restructuring with less concentration on the fiscal adjustment, yet, both were advised by IMF, the Institute alarmed.

     

    Although the government has managed to force it way through to complete the Domestic Debt Exchange Programme, but IEA fears the government’s attempt to close it ears on any advise for it to cut down expenditure (especially on its appointees and unnecessary projects), could prolong the commitment and assurance of the Paris Club and G-20 Members to give an assurance for a debt restructuring.

     

    “I look at the language that the IMF is using in their communique. The IMF is saying that there should be a combination of fiscal adjustment and debt restructuring to get to the sustainability level. But it looks like our government is not prepared to do much of the fiscal adjustment which CSOs have made concrete proposals”, Director of Research at IEA, Dr. John Kwakye juxtaposed. “Such deliberate neglect for fiscal adjustments is the bane of the economy.”

     

    He added that a debt restructuring with fiscal discipline would not result in sustainable debt management and thereby advised government to implement the numerous fiscal adjustment proposals made by CSOs to help revive the economy.

     

    “This government since last year when it started negotiating with the Staff of IMF, keeps telling Ghanaians they are very close. But if you examine the situation carefully the date keeps changing”.

     

    Dr. Kwakye suggested that one of the reasons for the delay could be the signals sent by government, on the Finance Minister’s refusal to embark on fiscal adjustment.

     

    Meanwhile, IMF’s Africa Department Director, Abebe Selassie, has padded Ghana government at the back as he believe Ghana has taken the tough economic decisions needed to win a rescue package from the Fund.

     

    In a space of four months, the government has increased taxes and imposed losses on domestic investors, in attempt to meet IMF demands for the $3 billion loan. Currently on an informal talks with bilateral lenders, though it has dragged on.

     

    Ghana has “done all of the prior actions that were expected of them for the program,” Selassie said in an interview. “They’ve done a really, really difficult domestic debt restructuring exercise. The country now needs to get the resources required to support reserves.”

     

    Bilateral lenders, including China, are now expected to set up a committee to start formal negotiations with Ghana in the next few days. First on the committee’s agenda will be a written commitment to provide relief to the West African nation, paving the way for the loan from the IMF.

     

    “Provided we have the financing assurances, we would go to the board very quickly after that,” Selassie said. “So within the next three, four weeks. That’s the key hurdle for us.”

     

    The talks are taking place under the Group of 20’s so-called Common Framework, which expands the Paris Club of sovereign creditors to include China and other nations. Just under a third of Ghana’s bilateral debt, $1.9 billion, is owed to China. That is just a fraction of the nation’s 575.7 billion cedis ($50 billion) of public debt at the end of November.

     

    Five days after a surprise interest rate hike to a record 29.5% on March 27, parliament passed a bill to raise an additional 4 billion cedis ($353 million) in revenue this year. That was after a previous 250 basis points increase in value added tax to 15%.

     

    The fiscal measures and restructuring of cedi-denominated liabilities will help the West African economy lower its public debt to 71% of gross domestic product by 2028, Finance Minister Ken Ofori-Atta said in a presentation Thursday. The IMF has said it needs be on track to drop to 55% by that year to qualify for support. Before the government’s interventions, it had been projected to reach 109%.

     

    “There’ll be burden-sharing all around,” Ofori-Atta said. “If you join us in this, you really will help us build a robust economy and come back and be able to resume our partnership with you and the markets.”

     

    The adjustments and latest tax increases are taking a heavy toll on Ghanaians. Millions, like Esther Annan, a street vendor in the capital, Accra, have seen their living standards drop as inflation soars.

     

    The mother of six took out a micro loan to fund her cloth and bed-linen business in January but has now missed weekly payments after local demand dried up and interest rates soared.

     

    “I play cat-and-mouse games with the lenders because there is no money to pay them,” she said. “The interest on the loans has become so high.”

     

    Local lenders, which were the most exposed to the domestic debt, are now expected to skew credit to sectors that can readily pay while those needing it most miss out, said Richmond Atuahene, an analyst at Salman Partners and Financial Consult Ltd. in Accra.

     

    The latest tax increases are “an additional cost and if industry can no longer bear it, it will be compelled to cut costs, including labor and output,” said Humphrey Kwesi Ayim-Darke, president of the Association of Ghana Industries. “Small and medium-sized companies, manufacturing and agriculture are going to be hardest hit because of their high risk premium historically.”

     

    A slowdown in credit growth and an expected drop in consumer spending could decelerate economic expansion this year, according to three economists surveyed by Bloomberg.

     

    “The downside risks to the government’s 2.8% real GDP growth target for this year have increased on the back of the tightened monetary policy stance,” Mark Bohlund, a senior credit research analyst with REDD Intelligence, said.

     

  • ‘Currency Board’ will effectively address monetary management infractions – IEA

    ‘Currency Board’ will effectively address monetary management infractions – IEA

    Adnan Adams Mohaammed

     

    As Ghana visage for a way out of its cyclical economic management mess, the government is advised to establish a ‘Currency Board (CB)’ to help in the monetary management process of the Bank of Ghana.

     

    The ‘Currency Board’, the Institute of Economic Affairs (IEA) believes will help stabilise the cedi and prevent instability in the economy in times of shocks. The Institute also think it will help to limit the Central Bank lending to the government

     

    These monetary control and management factors deficiencies have been the bane of Ghana’s economic management. According economists, the CB system has limited inflation, checks currency volatility and better position balance of payments.

     

    “You see, a Currency Board (CB) is a rigid monetary management system that is hedged in strict rules, with little room for discretion. The CB does not lend to government and it covers its currency fully by foreign exchange”, Lead Researcher at the Intitute, Dr. John Kwakye, in a paper published and titled “Institutionalising Fiscal Discipline and Macroeconomic Stability for Sustained Growth in Ghana: The Constitutional Pathway” noted.

     

    “The CB system has limited inflation, the currency does not depreciate and balance of payments crises are rare. This is close to the system in our Francophone neighbours, who restrict their Central Bank lending to governments and provide adequate cover for their currency, the CFA.”

     

    IEA buttressed its points that, the Francophone countries system guarantees them low inflation and a stable currency, but “you have Ghana that has chosen an independent Central Bank to conduct discretionary monetary policy’.

     

    It also blamed the Central Bank of Ghana for some of the economic woes, saying, “The Central Bank provides significant lending to government and covers the cedi with limited foreign exchange (40% in the Act). No doubt we face perennial price and currency instability!”

     

    “It is for this reason that some of us have argued that if we continue to abuse policy discretion and pay a high price for it in terms of macroeconomic instability, then we better hedge our policies by rules; tie our economic managers hands, so that we can enjoy rules-driven macroeconomic stability!”, it added.

     

    Finally, the IEA said despite Ghana having rules such as the Public Financial Management Act, the Bank of Ghana Act and the Fiscal Responsibility Act, the rules have not work because of lack of political way.

     

    “Let me say that it is not that we have had no rules at all in fiscal and monetary management. In fact, I can mention a couple of them, such as the Public Financial Management Act, the Bank of Ghana Act, the Fiscal Responsibility Act and the relevant provisions in the 1992 Constitution, which represent attempts to introduce rules in our fiscal and monetary management system”.

     

    “However, there are serious questions regarding not only their enforcement but their effectiveness as well. And that is the reason we feel strongly about the need to give constitutional backing to some of these rules”, it concluded.