Ghana’s economic woes due to external shocks – IMF boss

The MD of the International Monetary Fund (IMF), Kristalina Ivanova Georgieva-Kinova has attributed the current economic challenge facing Ghana to external factors such as the Russia-Ukraine war and the COVID-19 pandemic.

Speaking at the ongoing Africa Climate Change Adaptation Summit in the Netherlands, Georgieva-Kinova said the current global challenge calls for broader collaboration among global leaders.

“We are also recognising that this shock has exhausted our people,” she said. “People are tired of the pandemic and now they are hit a second time with inflation.”

“In many countries, the fiscal space is gone. When you look at the debt situation, for 25% of emerging markets that is not sustainable, just think of Sri Lanka and many countries that are in this position,” Georgieva-Kinova said.

“Actually, we see a country with strong economy, with strong fundamentals like Ghana, in a situation, in which it is harder to tap into markets because of these exogenous shocks, and for poor countries, it is over 60% that are in debt stress,” the IMF boss said.

Meanwhile, President Nana Akufo-Addo has given assurance to Ghanaians that his government will negotiate a good deal with the IMF to build a stronger economy.

On 1 July 2022, President Akufo-Addo authorised Ofori-Atta to commence formal engagements with the Fund. 

“I want to assure you and assure the people of Ghana that we are going to negotiate a good deal with IMF,” Akufo-Addo told New Patriotic Party (NPP) delegates at the party’s annual national conference in Accra on Saturday (16 July). “A deal that would allow us to revive our economy and to continue the task of building an even stronger economy than we had ever.”

Good arrangement

According to him, the country is in the position to implement a good arrangement with the IMF.

“We will be in a position not to negotiate, but implement a good arrangement. We have a tradition of taking Ghana out of difficulties.”

Akufo-Addo added: “We took Ghana out of HIPC, we took Ghana out of the derailed IMF programme of 2015. Our party was the one that made it possible, for us to survive the COVID pandemic with one of the lowest mortalities, of any government or any country, everywhere in the world. We have done it before and believe me we are going to do it again.”

“At the height of the pandemic, when people had to stay at home, no single worker in the public sector was dismissed, no salary cuts. On the contrary, not only were they paid in full and their jobs protected, we went further to make it possible, to organise free water, free electricity for the ordinary people of our country,” he recalled.

“Our responsibility is to confront the difficulties that are confronting our people and find an effective solution to it. And that’s exactly what we are going to do. We came to office under an IMF programme, a derailed IMF programme, which we inherited from the Mahama administration,” he added.

Asaase Radio