Ken Ofori-Atta, Ghana's finance minister, has been given permission by President Nana Addo Dankwa Akufo-Addo to begin official contacts with the International Monetary Fund (IMF) and ask the Fund to endorse an economic plan the government of Ghana has developed.
According to a statement from the Ministry of Information, this came about as a result of a phone call the President had with Miss Kristalina Georgieva, the IMF Managing Director, in which they discussed Ghana's desire to work with the Fund.
The announcement read, "At a meeting on June 30, 2022, cabinet affirmed its approval for the decision.
As part of a larger attempt to hasten Ghana's recovery from the obstacles brought on by the Covid-19 epidemic and, more recently, the Russia-Ukraine conflicts, the engagement with the IMF will strive to offer balance of payment support.
Just over three years after leaving the programme in December 2018, Ghana returns to the IMF.
In recent months, government expenditure has been reduced in order to prevent a full-blown financial crisis, and Ghanaians have been feeling the sting of record inflation as well as the effects of the Russia-Ukraine war.
economic situation
The economy of Ghana expanded by 3.3 percent in the first quarter of 2022 compared to the same time in 2021, and in May, inflation reached a record high of 27.6 percent.
This was true despite the deployment of a wide range of policies meant to guarantee that the fiscal deficit target of 7.4% of GDP in 2022 would be met.
In addition, the nation is struggling with a high level of debt and a declining cedi. The contentious E-Levy tax, which was authorised in April and promoted as a remedy for the economy's problems, has likewise failed to provide the revenues projected.
Protests
This week, there was a two-day demonstration in Accra against rising gasoline prices, inflation, and the state of the economy.
In a petition sent to the Ministry of Finance and Parliament, the Arise Ghana protesters demanded that the government adopt "pragmatic actions to ease the suffering of the people of Ghana."
The Arise Ghana organisation demanded that the government immediately repeal the Electronic Transaction Levy (E-levy), as well as take measures to stop the devaluation of the cedi and lower inflation.
The organisation also asked the government to act quickly to eliminate levies and taxes that it claims are to blame for the growing cost of food and gasoline.
Ghana in the IMF
The nation requested a $918 million loan from the IMF in April 2015 to assist stabilise the economy and maintain its faltering currency.
In collaboration with the government, IMF experts created a three-part programme to improve monetary policy, clean up the banking sector, and restore debt sustainability.
Ghana left the IMF programme in December 2018, and the Minister of Finance, Ken Ofori-Atta, promised the nation that the government would support the IMF reforms with legislative and institutional steps to guarantee the benefits obtained were irreversible.
He had remarked, "We are thankful to the IMF and are committed to preserve a combination of economic discipline and vitality that will ensure that we will not need to be rescued in that way in the future.