Kudos, stay the course - IMF boss to Ghana

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has urged managers of the economy to stay the course after achieving “many good indicators in this short period of time” in the country’s programme with the fund.

“Your growth is better than expected, your inflation is lower than expected, the progress in debt restructuring has been faster than expected, and now the task is to cement what is achieved,” she added.

Ms Georgieva gave the commendation during a meeting with President Nana Addo Dankwa Akufo-Addo at the Jubilee House in Accra last Sunday.

During her three-day visit to Ghana, Ms Georgieva — who used to be the CEO of the World Bank between 2017 and 2019 — met with the Vice-President, Dr Mahamudu Bawumia; the Governor of the Bank of Ghana, Dr Ernest Addison; the Minister of Finance, Dr Mohammed Amin Adam, and some civil society organisations.

Ghana secured a $3 billion IMF extended credit facility (ECF) in 2023.

This was after President Akufo-Addo had authorised the then Minister of Finance, Ken Ofori-Atta, on July 1, 2022, to commence formal negotiations with the fund to secure a balance of payment support.

This was part of the broader efforts to quicken Ghana's build-back in the face of challenges induced by the COVID-19 pandemic and the conflict between Russia and Ukraine.
Ghana's three-year IMF programme is in its first year of implementation.

So far, it has received a total of $1.2 from the IMF in two tranches.

Ghana

Interacting with the President, Ms Georgieva noted that this year, Ghana could not be more decisive because it was the period to bring confidence domestically and internationally at the level it was before or higher.

She said this was possible because the globe was witnessing a slightly better economy, adding that “the economic attitudes are better, and the critical resource of money would go (to) where confidence in the capacity of the country to perform is highest, so Ghana can be at this place (again)”.

On staying that course, she urged the managers of the economy to execute it with a sense of unity of the leadership of the country from top to bottom.

Ms Georgieva said she had met with the Governor of the central bank and the Minister of Finance, and commended them for instituting good initiatives that had made the reforms more inclusive.

She said she has had engagements with some Ghanaian women and civil society organisations which were very strong and vibrant, and stressed that “the strength of people here is the one that impressed me the most on my trip”.

She called for a stronger fiscal policy regime, debt management and reforms to create better opportunities for technology to generate a high level of integration of the economy.

Doing well

“All in all, we are incredibly fortunate to meet at a time that will be quite decisive for years to come because we are climbing the mountain, and we are doing quite well. We are not yet at the top. We need to keep climbing,” Ms Georgieva added.

“The sooner we do a great deal, the better for the country,” she said.

Ms Georgieva cautioned against a deal that might actually reverse progress.

“You cannot allow the Eurobond creditors to twist your arm because you have done a very painful domestic debt restructuring that hurt people here,” she stressed.

She advised that any Eurobond deal had to be fair to the country’s aspirations.

Paid off

President Akufo-Addo indicated that the decision he made in July 2022 to seek the support of the IMF after the difficult economic circumstances “is a decision that has already paid off in clear turnaround that we see in our economy from the very dire circumstances in which we were at the time we took that decision”.

He said all the positive economic indicators pointed to the fact that the foundation that the country was laying for the future was very strong.

He pointed out that after laying the foundation, there was the need to engineer the rapid growth so that the mass of people could benefit from the development of the nation, adding that this was the main task confronting the government.

Elections

President Akufo-Addo said this year he would appear before the electorate to justify his period in office and seek their mandate for his successor, Dr Mahamudu Bawumia, and, therefore, there was the need for Ghana to be rigorous in a good place and ensure that the interest of the people was protected.

He said “to some extent, some of the issues involved in those phenomena and statistics that you have put forward” were ultimately bound out with “what is going to happen in December, and there is the need for us to try and make the balance between the rigour that we recognise as being necessary for us to be at a good place, as well as making sure that the interest of our people are fully protected”.

He said there would be little point in pursuing a rigorous, rigid arrangement which at the end would fuel social unrest and difficulty and ultimately have negative repercussions for the political situation of the country.

“That will not be a happy position to be,” the President said.