Ken Ofori-Atta: Ghana’s Debt Crisis Will Be Managed Without IMF Support

Ken Ofori-Atta says Ghana will solve debt issues without support from IMF

Ghana is dedicated to managing its debt without the support of the International Monetary Fund (IMF), according to Finance Minister Ken Ofori-Atta, who expressed confidence in the government’s efforts.

According to government figures, Ghana’s overall public debt, which amounted at almost 77 percent of its GDP at the end of 2021 has driven one of West Africa’s major economies to the verge of collapse.

In March, the government announced a series of spending cutbacks to combat inflation, lower the public deficit, stabilize the local currency, and reassure investors.

However, it has persistently declined to seek assistance from the IMF.

“We have committed to not going back to the fund because… the fund knows we are [moving] in the right direction,” Ofori-Atta said during a press conference in Accra, Ghana’s capital.

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“It’s about validating the program we have in place and finding other ways of handling our debt.”

Despite attempts to curb price increases and stimulate recovery, consumer inflation in the gold, oil, and cocoa producer rose to an 18-year high of about 24 percent in April.

The goal, according to Ofori-Atta, would be to resolve the country’s internal debt, which has interest rates three to four times that of international debt.

“We need to decide ourselves what structure would be useful to us,” he continued.

The central bank hiked its main lending rate by a record 250 basis points in March, and it is anticipated to do so again on May 23 at the next Monetary Policy Committee meeting.

Another interest rate hike, according to Ofori-Atta, would be a “knee jerk reaction” to “imported inflation,” adding that prices have continued to rise following the March hike.

“We need to figure out an approach that in a way gives us fiscal space,” he added.

Ghana’s credit ratings were lowered due to worries about the government’s capacity to implement revenue-raising legislation.

A tax on electronic payments (E-Levy) that was authorized in April and promoted as a cure for financial troubles has been met with heated criticism, with critics claiming that it would disproportionately affect small business owners and low-income individuals.