I will not resign over IMF U-turn, says Ken Ofori-Atta

The finance minister says resigning will not be in the best interest of Ghana now as the country seeks to engage the IMF to revive the economy

The Minister of Finance Ken Ofori-Atta has said he will not resign over Ghana’s decision to go to the International Monetary Fund (IMF) for a bailout although he was against it in principle.

On 1 July 2022, President Akufo-Addo authorised Ofori-Atta to commence formal engagements with the Fund. Following the announcement, there have been several calls on the minister to quit.

However, speaking to the media at the ongoing New Patriotic Party (NPP) annual national delegates’ conference in Accra on Saturday (16 July), Ofori-Atta said resigning is not the best option now.

“I will not resign,” the finance minister said.

“It is almost like telling a father to resign from his children because he is changed his mind. There are times that decisions have to be made for the survival of a country and therefore if circumstances such as COVID or the Ukraine war occur which are not typical, it does change the environment, and sensible people will change their minds,” Ofori-Atta added.

“The engagement with the IMF will seek to provide balance-of-payments support as part of a broader effort to quicken Ghana’s build-back in the face of challenges induced by the COVID-19 pandemic and, recently, the Russia-Ukraine crises,” an earlier government statement read.

We’re committed to support Ghana, says IMF

The International Monetary Fund (IMF) has reaffirmed its commitment to support Ghana mitigate the current economic challenges facing the country.

An IMF team visited Accra from 6-13 July 2022, to assess the current economic situation and discuss the broad lines of the government’s Enhanced Domestic Programme that could be supported by an IMF lending arrangement.

The IMF team met with Vice President Bawumia, Finance Minister Ofori-Atta, and Governor Addison of the Bank of Ghana.

The team also met with the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank to engage in social spending.

The team from the International Monetary Fund was led by Carlo Sdralevich.

“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,” Sdralevich in a statement at the conclusion of the mission.

“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.

He added, “The IMF team held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability. The team made progress in assessing the economic situation and identifying policy priorities in the near term.

“The discussions focused on improving fiscal balances in a sustainable way while protecting the vulnerable and poor; ensuring the credibility of the monetary policy and exchange rate regimes; preserving financial sector stability; designing reforms to enhance growth, create jobs, and strengthen governance.”

Sdralevich said, “IMF staff will continue to monitor the economic and social situation closely and engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Program that could be supported by an IMF arrangement and with broad stakeholders’ consultation.”

“We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies.”

“Staff express their gratitude to the authorities, civil society, and development partners for their constructive engagement and support during the mission,” he said.

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