The International Monetary Fund (IMF) team has concluded its discussions with government officials concluding that Ghana is facing a challenging economic and social situation.
A team of IMF staff led by Carl Sdralevi? visited Accra during 6-13 July 2022 to assess the current economic situation and discuss the main directions of the government's expanded domestic program, which could be supported by an IMF loan agreement.
The IMF team met with Vice President Dr. Mahamudu Bawumia, Finance Minister Ken Ofori-Atta and Governor Ernest Addison of the Bank of Ghana. The team also met with Parliament's finance committee, civil society organizations and development partners, including UNICEF and the World Bank, to engage with social spending.
Concluding the mission, Mr Sdralevich said: “Ghana is facing a challenging economic and social situation in an increasingly complex global environment. The fiscal and debt situation has significantly worsened following the COVID-19 pandemic. At the same time, investors' concerns caused a downgrade in the credit rating, capital outflow, loss of access to the external market and an increase in domestic borrowing costs.
“Furthermore, the global economic shock caused by the war in Ukraine will hit Ghana at a time when the country is still recovering from the shock of the Covid-19 pandemic and has limited room to manoeuvre. These adverse developments contributed to a slowdown in economic growth, an accumulation of unpaid bills, a large depreciation of the exchange rate and a sharp rise in inflation."
He revealed that “the IMF team led initial discussions on a comprehensive reform package to restore macroeconomic stability and debt sustainability. The team made progress in assessing the economic situation and setting policy priorities for the near future. Discussions focused on improving the fiscal balance in a sustainable manner while protecting the vulnerable and the poor, ensuring the credibility of monetary policy and exchange rate regimes, maintaining financial sector stability and proposing reforms to boost growth, create jobs and strengthen governance."
He noted that "IMF staff will continue to closely monitor the economic and social situation and will engage with the authorities in the coming weeks to formulate their enhanced domestic agenda, which could be supported by an IMF agreement and broad stakeholder consultations."
He reaffirmed the IMF's commitment to support Ghana at this difficult time, in line with IMF policy.
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