The International Monetary Fund (IMF) staff team led by Carlo Sdralevich outline major problems affecting Ghana’s economy.
This follows an invitation by the Ghana government to the International Fund for a possible bailout as the Economic crisis has a toe on Ghana, they arrived in Ghana on the 6th July 2022.This was made known when the Bretton Woods Institution release a statement to the IMF on Wednesday, July 13,2022.The statement indicated IMF is willing and has agreed to support the Ghanaian Economy “We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies.”
“Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the COVID-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.
“In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for manoeuvre. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation.”
The press release also states IMF will from now will continue to monitor the economy and Fiscal climate for further engagement with the government and also on how IMF policies can be implemented successfully,In summary. The IMF has classified Ghana's situation into four main causes of Ghana situation
1. Ghana is confronted with a severe economic and social position in an increasingly hostile global economic climate.
2. Ghana's economic and financial condition has deteriorated significantly as a result of the COVID-19 outbreak.
3. Concerns among investors have resulted in credit rating downgrades, capital outflow, lack of access to external market and increase domestic borrowing rates
4. According to the IMF, the world economic shocks caused by the Russian-Ukraine conflict are hitting Ghana at a time when the nation is still recuperating from the Covid-19 pandemic impact and had limited space to operate.
Per the IMF assessment, the aforementioned trends have made a significant contribution to slowing the economic growth, the buildup of late payment, a significant currency rate devaluation and an increase in inflation.
The IMF delegation in Ghana met with the Vice President Dr, Mahamudu Bawumia, Finance Minister Ken Ofori-Atta and the Bank of Ghana Governor Ernest Addison.During its engagement, the team also met with the Parliament’s Finance Committee, civil society organizations and development partners such as UNICEF and the World Bank.
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