IMF team to commence bailout talks with Gov’t on Wednesday

Source The Ghana Report

Officials of the International Monetary Fund (IMF) are expected in the country on Tuesday, July 5, to begin conversations on bailout requests.

The team comprising senior officers from the Fund and local staff will then commence in-person meetings with the Government of Ghana on Wednesday, July 6.

Among other reasons, their visit to the country would largely involve deliberations on the modalities for a package to support Ghana’s ailing economy.

The country is faced with high debt, low revenue, rising inflation, steep depreciation of the cedi against other major currencies, and a general rise in the cost of living attributed to external factors such as the Russia-Ukraine war and the COVID-19 pandemic.

Details of the bailout programme and its conditionalities will be announced after the meeting.

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It will be recalled that on Friday, July 1, 2022, the Information Ministry announced that President Nana Akufo-Addo had approved for Ghana to begin engagements with the IMF for a bailout.

The ministry said the Minister for Finance, Ken Ofori-Atta, will be leading the negotiations with the IMF in the coming days.

The news was received with mixed feelings, as it comes as a major U-turn by the government after it vowed never to go under an IMF programme.

The Minority in Parliament, for instance, said the government had delayed since the country’s economy had not been in good form for many months.

The Former Deputy Finance Minister Cassiel Ato Forson welcomed the government’s decision to go to the IMF for assistance.

“I am glad that finally, the NPP government has taken the decision to go to the IMF in a way that Ghana can get the programme obviously to implement, that will, in the long term, bring about the economic stability that we want.

“I have always said that Ghana first. First a Ghanaian, and second a politician. I want to reiterate the fact that this administration has unfortunately delayed too long; it has taken them too long to take a very simple decision and to work very hard to get the programme,” the MP for Ajumako-Enyan-Esiam Constituency said in an interview.

For the Deputy Ranking Member of Parliament’s Finance Committee, Isaac Adongo, the government’s decision not to seek an IMF bailout early would make negotiations difficult.

“The challenge now is that their (government’s) ego for a very long time made it difficult for them to make the right decisions, and here we have arrived at a point where it is going to be a very tough couple of months in the negotiations of this program because we have arrived at a point where you just don’t have the capacity to negotiate at a point of strength.

“The Programme led by Ken Ofori-Atta will be meaningless. It will be an exercise in futility. They will have no commitment to the very milestones that will be agreed upon. The IMF, the World Bank, and the multilateral institutions are quite clear about the status of Ken Ofori-Atta in any such arrangement. And so to ask him to even lead the process smacks of some level of hypocrisy and a government that is indecisive,” Isaac Adongo indicated.

Also, Member of Parliament (MP) for Sagnarigu, ABA Fuseini, believes the decision to go to the IMF for support is an indication of the mismanagement of the economy by the Akufo-Addo-led administration.

“A return to the IMF shows the catastrophic mismanagement of the economy.

“They told us that they were not going to the IMF. They must apologise to the people of this country for imposing hardship on Ghanaians, and they are now going to the IMF,” he said.

But their colleagues on the other side of the bench have a contrary view despite the glaring u-turn on the bailout.

The Deputy Finance Minister, John Kumah, who was very vocal against going to the IMF, has justified the move, explaining that it will help the country solve economic challenges faster.

“Our objective as a government is to restore confidence in the economy and rebound it from the difficulty, from the challenges.

“We believe that where we stand now, an IMF intervention will help us come out quicker than we could. We hope that it will benefit the country,” he said on TV3.

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