He said: “Economic policy after policy ever since Ghana subscribe to International Monetary Fund (IMF) and the World Bank Ghana has seen, what they have done is that they gave us omnibus policy; what they have done in some country, they would bring it here and the evidence abound. IMF and World Bank have not been able to salvage any economy anywhere in the World.”
Read the full story originally published on November 11, 2017, by ghanacrusader.com
His response comes on the back of a press conference on Wednesday, 8th, November, 2017 held by the Minority in Parliament at which they proposed that government’s inability to raise the initial amount ($2.25 billion) was due to its mismanagement of the economy.
Sharing his thoughts on the Energy Sector Bond, he stated that, ”Economic policy after policy ever since Ghana subscribe to International Monetary Fund (IMF) and the World Bank Ghana has seen, what they have done is that, they gave us omnibus policy; what they have done in some country, they would bring it here and the evidence abound. IMF and World Bank have not been able to salvage any economy anywhere in the World.”
”So evidently the IMF has never been the solution to a nation’s difficulty. So it was at this point Gov’t of Ghana decided that may be needed policy confidence from the IMF and decide IMF gave us thumbs up in the raising of a loan from the International Community,” Bernard Mornah stated.
The cedi, the worst-performing among 148 currencies tracked by Bloomberg, is down more than 57% against the dollar this year and is on track to slip for a seventh straight month in November.
The last such streak was in 2015. Investors who continued to bet on the dollar after such an episode gained an average 17% over the next six months.
Slipping Away
Cedi’s rare 7-month losing streak against dollar has led to more declines
Ghana’s inflation accelerated at 40% in October and the government has yet to reach a bailout deal with the International Monetary Fund, prompting investors to shun the nation’s assets.
Lawmakers in the West African nation Thursday are debating an opposition motion to remove Finance Minister Ken Ofori-Atta over the economic crisis.
The General Secretary of the New Patriotic Party (NPP), Justin Kodua Frimpong, has been spotted in parliament as the house considers a motion by the Members of Parliament on the opposition side for the removal of Ken Ofori-Atta as the Minister of Finance.
The National Democratic Congress MPs filed a motion in parliament on October 25, 2022, to be debated and voted on 14 days after its receipt by the Speaker of Parliament.
Upon the maturity of the period, the house is considering the motion moved by the NDC MPs, and they have hoped that the New Patriotic Party (NPP) MPs would support their call.
This expectation is based on the fact that some weeks ago, some 80 NPP MPs took a historic stance when they called on President Nana Addo Dankwa Akufo-Addo to immediately sack Ken Ofori-Atta over his poor performance.
The MPs stated in their press conference that should the president fail to do this, they would begin boycotting government business in the house, including the reading of the 2023 budget statement and economic policy.
This call has since been placed on hold after the president met with the NPP MPs and urged them to give the Minister of Finance time to complete some pressing government business, including his IMF request.
But ahead of the hearing of the motion for a vote of censure against Ken Ofori-Atta, the General Secretary of the NPP, Justin Kodua Frimpong, wrote a letter to its MPs, directing them to stay away from the vote.
In the statement dated November 9, 2022, the national leadership said that “While the National Executive body acknowledges the prevailing socio-economic conditions in the country and the need for urgent remedial interventions, it is our utmost position that the demand of the NDC-led Minority Caucus is ill-intended and aimed at derailing government’s efforts at resolving current socio-economic upheavals.
“The leadership acknowledges that the Minister for Finance is the leader of government’s negotiation team with the International Monetary Fund. Considering that negotiation with the IMF is nearly completed, the National Executive body of the Party strongly believes that the removal of the lead person spearheading the negotiation may adversely impact the progress made thus far.”
On the day of the vote of censure, the NPP MPs, led by the MP for Effiduase-Asokore, Dr. Nana Ayew Afriye, stated in an interview that while they are bent on getting Ken Ofori-Atta out, they would not support the motion of the NDC MPs for a vote of censure against the minister.
“We are here to reiterate that, however much you heard us speaking that based on the intervention of the president, we will have to see the minister of finance do his work, read budget, see through appropriation and then the president will act.
“Over the days, we have heard the finance minister speaking and his speaking has influenced majority of us in the caucus, not only to state that we are back to the original position that we took, and that position is that the minister of finance must not be the one to read the budget, and must not be the one that would do the appropriation.
“We are here to tell you this morning that this will be very soon for you to see, the position of us and we are going to be positively defiant about that posture until that action is taken. However, we are not going to support the cause of the NDC in the chamber this morning.
Amid the central bank’s continued aggressive policy stance, a free-falling cedi and an eclectic collection of external factors, the research arm of Databank has projected an end-of-year overall Real Gross Domestic Product (GDP) growth rate of between 3.5 and 4.5 percent.
The lower end of the band is consistent with forecasts by the finance ministry, which in mid-year pegged the growth rate at 3.7 percent; as well as the International Monetary Fund (IMF) suggesting in its most recent Economic Outlook Report the year will close with growth at 3.6 percent, down from 5.2 percent earlier in the year.
Databank anticipates industry, and the manufacturing sub-sector in particular, to suffer the brunt of unfavourable conditions in its analysis of the first three quarters and outlook for the remainder of the year, titled Tough Times Calls for Tough Measures.
“We maintain our FY22 growth forecast at 4 percent ± 50bps as the ongoing policy squeeze, tighter operating environment, and external factors are expected to curtail growth,” the report reads in part, even as the Purchasing Managers’ Index (PMI) – which measures the prevailing direction of economic trends in the manufacturing and service sectors – plummeted to 45.6pts at the end of September 2022 from 50.8pts in January.
“With the GH cedi enduring intense depreciatory pressure, we expect that input costs will continue to rise – further constraining growth in the manufacturing sub-sector. We expect a hardening operating environment for businesses, and the monetary squeeze to remain a significant risk to the near-term growth outlook,” it added.
On the back of a strong performance in the manufacturing sub-sector, which increased by 8.8 percent year-on-year, the larger industry sector experienced a recovery in the second quarter; rocketing to 4.4 percent compared to the -0.5 percent registered in the first quarter (YoY).
Comparatively, agriculture expanded by 4.6 percent at end of the second accounting period; a 40-basis point decline from the first quarter’s 5 percent growth rate as the cost of inputs, particularly fertiliser, took a toll.
In contrast to the meagre 3.7 percent recorded in quarter-one, the services sector once more emerged as the most formidable – hitting 5.2 percent over the period. Unsurprisingly, the information and communication subsector expanded by 12.4 percent, with the main sectors being health (12.7 percent) and education (13.2 percent).
Despite an easing of pressure on the cedi owing to a number of measures introduced by the central bank as well as inflows of the US greenback, most notably from the US$1.13billion COCOBOD syndicated loan, depleted reserves and uncertainty remain over the protracted negotiations with the IMF, Databank noted.
“Bare international reserves could increase offshore portfolio outflows. Offshore investors question government’s capacity to meet its external debt service commitments and foreign portfolio outflows, considering the substantial fall in foreign exchange reserves – 2.9 months of import cover as of Aug, 22. This significant reserve fall has intensified offshore demand while limiting supply-side interventions from the central bank,” the report noted.
This, Databank believes, will keep demand for forex safe-haven assets to remain heightened in the near-term.
“An uncertain economic environment could sustain demand for safe-haven assets. As inflation still outpaces domestic yields and the GH¢ continues to depreciate, the risk of holding onto GH¢-denominated assets have been elevated due to losses associated with inflation and depreciation.
“Local investors will likely seek safe havens to protect capital and real returns. This approach has enhanced the allure of US$-denominated assets among local investors. We expect the corresponding foreign exchange demand for safe-haven assets will exert further depreciation pressure on the local currency in 4Q22,” it explained.
Samantha Power, USAID Administrator, made the announcement during a visit to Lebanon ahead of a trip to Egypt for the United Nations Climate Conference (COP27).
During his visit, Power plans to meet with Lebanese political leaders to press for a resolution to the country’s political vacuum and for leaders to implement a series of political and economic reforms mandated by the International Monetary Fund in order to secure a $3 billion aid package.
The visit comes at a time when Lebanon is experiencing its worst economic and financial crisis in modern history.
Power declined to say, however, whether any U.S. assistance would be contingent on Lebanon taking these measures.
“We are not focused on what happens if those reforms don’t happen. The reforms have to happen,” she told The Associated Press.
The prospect of an IMF deal “should be enough to end the infighting and bickering and do what is needed for the sake of the country,” Power said.
USAID has provided about $260 million to Lebanon in 2022 to date. On Wednesday, Power announced an additional $72 million for food assistance to some 650,000 people over five months as part of a $2 billion global food security initiative.
Lebanon, which relies heavily on imported food and has historically imported the majority of its wheat from Ukraine and Russia, has faced increased food security anxieties in the wake of the Russian war in Ukraine.
Power also announced $8.5 million to fund 22 new solar-powered pumping stations. Lebanon has been dealing with a crippling electricity crisis that has also led to water shortages due to lack of power at pumping stations.
The shortages in public water supply are fueling a cholera outbreak, the first Lebanon has seen in three decades. Most Lebanese now rely on water trucked in by private suppliers, which is often not tested for safety.
Policymakers need to build capacity and sharpen their skills to design policies that will enable countries to restore price stability and design fiscal plans to alleviate the cost of living pressures, Director General of West African Institute for Financial and Economic Management (WAIFEM), Dr. Baba Y. Musa, has said.
Given that countries are experiencing broad-based and sharper-than-expected slowdowns, with inflation higher than seen in several decades, he noted that capacity building for appropriate policies is required.
He made these remarks at the opening session of the WAIFEM and International Monetary Fund’s (IMF) Regional Course on Macroeconomic Diagnostics (MDS) in Accra.
The Deputy Division Chief at International Monetary Fund, Boriana Yontcheva, also noted that while happenings have left some growing and emerging economies stranded, it is necessary to adopt a “more sustainable debt growth path” and develop policies which can promote growth.
“The COVID-19 crisis is a major shock for the entire world, and obviously the world got to a point where it was indispensable to fight COVID-19 and countries spent what they could in order to save lives.”
“Now that we are coming out of the crisis, the necessity to rebalance macroeconomic accounts becomes unavoidable. So, it will be essential for countries in Africa and elsewhere to find a way to slowly go back to a more sustainable debt-growth path. This comes through targetted fiscal priorities, but also through policy that promotes growth,” she said.
In a statement read on his behalf, Governor of the Bank of Ghana, Dr. Ernest Addison, echoed the country’s efforts in addressing its economic challenges; adding that participants “can count on WAIFEM and the Institute for Capacity Development (ICD) for building the capacity of technical staff and policymakers in this critical area of macroeconomic management”.
Commenting on the country’s negotiation with the IMF, he stated: “The Monetary Policy Committee recognises the fact that the current condition is sub-optimal and will remain interim until agreements are reached on an IMF-supported programme”.
Dr. Baba Y. Musa noted that the two-week regional course is designed to strengthen participants’ ability to comprehensively assess their countries’ macroeconomic situation: including the current state of fiscal stance, monetary policy; financial stability; and the medium-term prospects of the economy, taking into account the sustainability of public and external debt, possible misalignments of the exchange rate and vulnerabilities arising in the different sectors.
“At the end of the course, participants should be able to analyse potential output, calculate output gaps and diagnose the outlook for the economy. Also, to assess the stance of current fiscal, monetary, exchange rate, financial policies and macro-financial linkages, including through the analysis of financial sector soundness indicators.”
“They must also be able to assess the economy’s medium-term prospects, especially the sustainability of public and external debt; and identify possible external and internal economic risks and vulnerabilities to economic growth, and develop policies to address them,” he said.
He made the comment after projections were made by some economists that Ghana will go back to IMF for funds to deal with the rising debt stock and other pressures on the economy.
• This is in reaction to claims that government will run to IMF for aid
Finance Minister, Ken Ofori-Atta, has squashed claims that government will run to the International Monetary Fund (IMF) to financial assistance.
His comment comes after projections made by some economists that Ghana will go back to IMF for funds to deal with the rising debt stock and other pressures on the economy.
In a Citi Business News report, Ken Ofori-Atta said government will rather go on the Eurobond market to look for funds.
Reacting to whether or not government will run back to IMF, Ken Ofori-Atta said, “Absolutely not. We’ve gone to the Eurobond market, I guess 4 out of the 5 years since we came and those are always alternatives that we consider.”
Minister for State at the Ministry of Finance, Chares Adu Boahen, had earlier said the purchase of Africa’s first zero-coupon dollar bond would help the country limit interest payments over the four-year term.
According to the Finance Ministry, the average weighted interest rate on the country’s domestic debt stood at 17.2% at the end of 2020 compared with 5.3% for external debt.
Former President John Dramani Mahama has noted that the budget to the Office of the President in 2022 was too high.
He said the budget has been increased from ¢700million to ¢3.1billion this year.
Mr Mahama asked President Nana Addo Dankwa Akufo-Addo to cut the budget to his office in these times of economic difficulties.
“The budget for the Office of the President has ballooned, over the last six years, from GH¢700m to GH¢ 3.1bn in 2022,” he tweeted on Tuesday November 8.
He added “For expenditure rationalization to be successful, it must first start in the President’s office. Substantial savings of GH¢1bn can be made by slashing the budget.”
Member of Parliament for Bortianor-Ngleshie Amanfro Sylvester Matthew Tetteh and a member of the New Patriotic Party, has charged Finance Minister Ken Ofori-Atta of behaving in bad faith after the president begged the majority in parliament to remove him from office.
The minister’s remarks after the president asked for more time, according to the majority member of parliament, may have an impact on the president’s appeal.
“But when the finance minister, after this, goes public and starts making such public statements, we don’t know the challenges he’s gone through… I mean, these are comments in bad taste, and that is what I am saying, from where I sit, the signals I am picking, such comments, if it is not checked, will go down on the president’s plea,” he stated on Tuesday, October 11, 2022, edition of Good Morning Ghana on Metro TV.
“We had a meeting, and the president had made a plea; the majority caucus had taken that plea in good faith and to have gone through a process the president had asked. One party, in this case, should not go to town. It’s not good,” he added.
He hinted that the caucus would likely take action, such as boycotting the minister’s upcoming budget presentation in parliament, if his utterances are not checked.
“Events after and the subsequent pronouncements by the minister, the signals I am picking, if they don’t address it, he will come to the house to meet an empty chamber,” he stated.
Following an open call by about 80 majority MPs for the sack of Ken Ofori-Atta, President Akufo-Addo convened a meeting with the caucus where he is said to have made some pleas.
According to reports, the president asked the caucus to give the minister some time to conclude the government’s ongoing negotiations with the International Monetary Fund (IMF) and the presentation of the 2023 budget in parliament.
But responding to the calls for his sacking, Mr Ofori-Atta, in a recent engagement with the Association of Ghana Industries (AGI), said he rather remains focused on helping the country overcome the current economic challenges despite the pains he has gone through being the minister.
“You have a finance minister who has gone through all the pains and aches, and nobody can really come and say, ‘we don’t understand what we’re doing’,” he stated.
Cassiel Ato Forson, Member of Parliament for Ajumako Enyan Essiam Constituency in the Central Region has alleged that government went on a borrowing spree in the lead-up to the 2020 polls.
Ato Forson, who is the Ranking Member on Parliament’s Finance Committee said a total of GH¢67 billion was borrowed, an amount which he says the Nana Addo Dankwa Akufo-Addo-led government splurged on campaigning.
He said the amount was also shared among members of the governing New Patriotic Party, NPP, like ‘kelewele’ – a local snack made of fried chopped plantain with pepper usually accompanied with groundnuts.
“Because of the elections, they decided to borrow GH¢67 billion, and shared the money to their party supporters. They shared Ghana’s money like kelewele,” Ato Forson claimed in an interview with pro-National Democratic Congress channel, Woezor TV.
The NPP government has serially been accused of overborrowing and reckless spending leading Ghana into financial difficulties.
The government insists that the twin effects of the COVID-19 aftermath and the Russia-Ukraine war are to blame for the headwinds and that measures are being put in place to rectify the challenge.
Government borrowed GH¢67 billion; ‘shared it like kelewele’ – Ato Forson claims
Government borrowed GH¢67 billion; ‘shared it like kelewele’ – Ato Forson claims
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President Akufo-Addo in late October delivered an address on the economy, admitting that Ghana was in a crisis, whiles outlining measures being undertaken to reverse the tide and put the economy on a path of growth and prosperity.
Broadcast journalist, Bridget Otoo, has reacted to a tweet shared by her employers, Metro TV, wishing the Minister of Finance, Ken Ofori-Atta, a happy birthday.
Retweeting the post, she captioned it with a rhetorical question, asking the TV station, “You and who?”
The original post by the station read, “All of us at #MetroTV wish Ken Ofori-Atta a happy birthday. Enjoy today Sir.”
Bridget joins the tall list of celebrities fanning for the minister to be discharged of his duties for how poorly he has performed in his role as the chief financial employee of the government.
The country has experience unprecedented economic downturns since the stated of the year, in what many have described as ‘the worst time in our economic history’.
Aside from that, calls for the dismissal of the Minister for Finance and Economic Planning, Ken Ofori-Atta, have heightened in the last couple of weeks following the wobbling state of the economy.
Although netizens have taken to social media to whine and call for the dismissal of the finance minister, President Nana Addo Dankwa Akufo-Addo has mounted a spirited defence of his appointee, indicating that he needs three weeks for him to finalise the International Monetary Fund (IMF) deal.
In the midst of continuing negotiations with the International Monetary Fund, the Ghanaian government is reportedly working with four separate consultancy firms on the nation’s economic policies and debt management.
This is stated in a Joy Business study credited to Singapore-based financial and business research company Redd Intelligence.
Due to the fact that the negotiations have not yet been established, the four advising firms are allegedly communicating with the government informally.
Redd Intelligence lists these companies as Lazard, an investment bank; Global Sovereign Advice, a sovereign consultancy firm; Hogan Lovells, a legal firm; and Lion’s Head Global Partners, an investment banking and advisory organization.
“Two external bondholder committees are likely. Holders of part-guaranteed 2030 Eurobond may want to set up a separate group”, Redd Intelligence noted.
Meanwhile, the Singapore-based finance company said investment bank, Lazard has been primed to be selected as the financial advisory with the view of pairing with law firm Hogan Lovells on a joint mandate to offer advisory services to Ghana.
In addition to this, consultancy services firm focused on economic and financial strategy Global Sovereign Advisory (GSA) is said to be working with the government of Ghana while investment banking, asset management and advisory firm, Lion’s Head Global Partners is also engaged with government with focus on emerging and frontier markets.
The outspoken congressman demanded immediate action by reconsidering plans, policies, and programs to guarantee Ghana gets weaned off contributions and outside help without going into detail about the facts of his accusation.
“The economy is tough and business is tough. I would be dishonest if I sat here and claimed differently. I have to acknowledge that times are difficult.
“But there is hope and what we should bear in mind is that it is situations like this that births inventions and innovations,” he stressed.
He related to pragmatic policies citing the touted policies of Dan Lartey’s Great Consolidated Popular Party, GCPP, and the Acheampong era. “We should put policies in place to help us live as normal human beings created by God.
He also referred to a list of imports and how much it costs, advancing thus, “let us address the importation of certain goods, import substitutions and build more factories,” citing how the 1D1F projects can help build an export-oriented economy as compared to the import-dependent one Ghana is grappling with.
Later that morning, a group of NPP MPs held a press conference demanding the removal of the Finance Minister over his management of the economy and the hard times that citizens were facing.
President Akufo-Addo intervened and got a concession on two grounds, that the Minister be allowed to conclude initial talks with the International Monetary Fund and present the 2022 budget and see to passage of its appropriation.
The president has also addressed the nation on the economic challenges and how the government intends to tackle them.
According to the Public Relation Officer of the Union, Joseph Paddy said the recent economic challenges in the country have resulted in less import activity at the ports.
He attributed the development to the increasing cost of duty and freight charges occasioned by the persistent depreciation of the cedi against the US dollar.
“Containers that are coming out of the port are nothing good to write home about. People are not importing, people are keeping their money because if you import you can’t sell and break even or even maximize. So, what we are going to see in the shortest possible time we are going to see a shortage of goods,” Mr. Paddy is quoted by Joy Business.
“They rather prefer to keep their monies in Treasury bills rather than import and lose and due to rising cost of living in the country, you seriously can’t import at that point and make profit. So, they are less import activity for many of our members”.
“For instance, I went to the port just on [November 1, 2022], it is an eye sore, no containers are coming out of the ports; even Golden Jubilee where they clear about 100 containers a day, you go there and it’s about two containers or 30 containers”, the GUTA PRO stressed.
Ghana’s dealings with the International Monetary Fund (IMF) may have an adverse impact on the economy and the wellbeing of some Ghanaians.
According to the Minister for Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey, some employees in the public sector can lose their jobs due to some conditions the IMF would present to provide Ghana an economic recovery programme.
In a published article on November 3, 2022, the Minister wrote “we have to either impose IMF-guided austerity, potentially leading to labour retrenchment and accompanying social instability, as witnessed in Argentina and elsewhere, or home-grown yet equally tough decisions to satisfy the markets and, hopefully, pave the way back to a functioning economy.”
She further described Ghana’s current position to go for an IMF support against a domestic programme for robust growth as “a choice between the devil and the deep blue sea.”
The Foreign Minister strongly believes that the COVID-19 pandemic and the ongoing Russia-Ukraine war has aggravated the country’s economic woes.
“We cannot forget that before the invasion of Ukraine, COVID-19 had exposed the lack of resilience of the economies in which the majority of the global population live. In fact, the war in Ukraine exacerbated the harsh effects of the downturn many countries were already experiencing, deepening poverty, unemployment and food insecurity,” she said.
Ghana formally reached out to the IMF in July after its domestic initiatives, such as the Electronic Transaction Levy (e-levy) to help restore the economy faced severe challenges. In September, engagements between the Fund and a government delegation commenced.
During that period, some Ghanaians and institutions opposed government’s decision to seek support from the IMF as done by previous governments.
The Ghana Trades Union Congress (GTUC) stated that the plight of Ghanaians would worsen following an IMF deal. According to the Finance Minister, an economic programme from the IMF is to help the country stay afloat in the interim. Ghana hopes to receive $3 billion from the Fund.
Meanwhile, renowned economist, Kwame Pianim, has revealed that Ghana’s negotiations with the IMF are not going well as expected.
He noted that the IMF is keenly waiting for the President’s definite pronouncement before they come in to support.
“The IMF negotiations are not going well. I know this for a fact. What the IMF is waiting for is a bold credible pronouncement from the president as he did over [the] Covid-19.
Below is the full statement by the Foreign Minister captioned “We Are Running Out of Time“
I was told many years ago about a common refrain in newsrooms: “If it bleeds, it leads”. In other words, the bloodier an event, the more prominent its place in the newspaper or bulletin. I believe this axiom still holds true today. It explains why the catastrophic sights and sounds – the bleeding – in Ukraine is top of mind for the world. And justifiably so.
However, as Ghana assumes the Presidency of the United Nations Security Council in November, the world cannot afford to focus solely on events in Ukraine, its impact on the living conditions of people everywhere notwithstanding.
We cannot forget that before the invasion of Ukraine, COVID-19 exposed the lack of resilience in the economies in which the majority of the global population lives. In fact, the war in Ukraine exacerbated the harsh effects of the downturn many countries were already experiencing, deepening poverty, unemployment and food insecurity.
We cannot forget either that the UN Security Council faced a leadership crisis in finding better ways to respond to threats to international peace and security, as the nature of those threats were, themselves, changing. Africa, for instance, has become the epicentre of terrorism. Meanwhile, in the countries where the UN maintains its signature peacekeeping missions, some of the host countries have chosen, instead, to engage third parties, sometimes in conflict with the operations of UN peacekeepers.
It is clear that the ways in which the Security Council approaches the mandate for international peace and security ought to change if we are to have sustainable peace, which is a prerequisite for achieving sustainable development goals (SDGs) by 2030. Right now we are running out of time in transforming the lives of people and saving our planet.
At the UN, Security Council reforms are often seen only in terms of expanding the permanent membership and power of veto to make the council more representative of all of the peoples of the world. Those reforms are essential and necessary. But we believe that it is equally important to look at another area of reforms that would enable peace to serve the needs of ordinary people for resilience and good quality of life.
In this, we are inspired by the example of the second Secretary‐General of the UN, Dag Hammarskjold, who had an innovative approach to the possibilities of the UN and its Charter and is credited with the introduction of peacekeeping. The bold act of adopting a General Assembly Resolution on November 7, 1956, which launched the first peacekeeping operation in history, the UN Emergency Force in the Middle East (UNEF), at a time when it was urgently needed, should inspire us in our time to act equally boldly because circumstances have changed.
Like Hammarskjold, we must recognize that “the purposes of the Charter (are) fixed and binding, but the working methods of the Organisation must be flexible and innovative”.
President Nana Addo Dankwa Akufo-Addo of Ghana and I are calling on the Council to consider that time has come for another departure from the norm as Hammarskjöld did when UNEF was established.
As my country Ghana prepares to preside over two high-level debates of the Council, we want to focus, like a laser beam, on the security gap and the need for a new and innovative template for success. That template should consider the factors that make peacekeeping operations almost permanent, and why individuals and communities become susceptible to radicalisation and recruitment as terrorists, driving the new face of threats to international peace and security.
In the Sahel and coastal West Africa, the countries that were the most successful in reaching striking distance of the SDGs, especially on poverty reduction and education, now find themselves struggling, as poorer countries rather shoulder the worst impacts of the COVID-19 pandemic, Climate Change and conflict in Europe. High fiscal deficits, escalating debt and downturns in economic activity are pushing us out of the bond markets at a time when inequality soars and unemployment and underemployment of millions are turning frustration into hopelessness. Increasingly, even some of the middle classes in Africa and other developing countries are beginning to lose faith in the democratic systems they fought so hard to establish.
The road back to robust growth, which Ghana and a number of African countries experienced successively in the years before COVID-19 struck, is currently a choice between the devil and the deep blue sea. We have to either impose IMF-guided austerity, potentially leading to labour retrenchment and accompanying social instability, as witnessed in Argentina and elsewhere, or home-grown yet equally tough decisions to satisfy the markets and, hopefully, pave the way back to a functioning economy. The harsh sacrifices required, themselves, have become a source of instability and an invitation to malign actors.
In the Sahel, climate-induced insecurity, poverty, high illiteracy rates and education that neither teaches skills nor a culture of peace and non-violence (SDG Target 4.7), youth unemployment and the absence of the State in large swathes of territory have created the environment in which terrorists thrive and undermine the effectiveness of the kinetic military operations to root them out.
It is clear that the critical need to fill the security gap brought on by economic and other root causes of conflict should be a priority for promoting and maintaining international peace and security. Secretary-General Antonio Guterres has been insistent on the need for funding the entire peace continuum, including increasing resources for programmatic financing, and for a mechanism for fighting terrorism in Africa.
The Council can no longer turn a blind eye to the accumulating evidence before us. That means ensuring that UN Security Council-mandated peace support missions or counter-terrorism have a balanced approach to both the military and civil components, with as many resources devoted to building community resilience, access to good quality education and training, and mitigating climate impacts and reclaiming land and water bodies on which communities depend.
It means standing with other organs of the UN to advocate for a new model of development cooperation that reinforces the capacity of developing countries to deepen their development resilience. I know that these may not make for easy headlines but we must bring attention to, and act on them as a matter of preventive urgency.
It is time for bold thinking and bolder action or we shall simply run out of time, leaving us with neither peace nor development – except bloodier headlines.
The President on Sunday, October 30, 2022 assured the citizenry that his government is tackling the economic problems and believed they will soon be relieved of the hardships.
Highlighting some measures the government is undertaking to address the plight of the populace, the President said; “We are in a crisis, I do not exaggerate when I say so. I cannot find an example in history when so many malevolent forces have come together at the same time. But, as we have shown in other circumstances, we shall turn this crisis into an opportunity to resolve not just the short-term, urgent problems, but the long-term structural problems that have bedeviled our economy.
“I urge us all to see the decision to go to the International Monetary Fund in this light. We have gone to the Fund to repair, in the short term, our public finances, and restore our balance of payments, whilst we continue to work on the medium to long-term structural changes that are at the heart of our goal of constructing a resilient, robust Ghanaian economy, and building a Ghana Beyond Aid.
“I am able to report to you, my fellow Ghanaians, that the negotiations to secure a strong IMF Programme, which will support the implementation of our Post COVID-19 Programme for Economic Growth and additional funding to support the 2023 Budget and development programme, are at advanced stages, and are going well.”
But to Mr. Pratt, the President should have touched on the concerns of the Members of Parliament and Ghanaians about the Finance Minister and the size of his government.
According to him, sacking the Finance Minister, Ken Ofori-Atta and reducing his government size is not the solution to the economic problems, however it will give the people hope that he (President Nana Addo) is paying attention to them and is serious about resolving the economic challenges.
Speaking to host Kwami Sefa Kayi on Peace FM’s morning show “Kokrokoo”, Mr. Pratt explained that the President should, for aesthetics purposes, heed the calls to dismiss the Finance Minister and minimize the number of his Ministers.
“Sometimes, something is not the real foundation but it helps in terms of public perception and so on. I believe those calling for the dismissal of Ken Ofori-Atta, Charles Adu Boahen and saying the number of Ministers should be reduced are not saying it because that’s the solution to the problem, because it is not the solution to the problem, but it helps with aesthetics. It gives people the confidence that the government is concerned about their grievances and wants to do something about it. That is the context . . .” he stated.
The Minority in Parliament says government will announce a haircut on some investments within the next 14 days as part of its debt restructuring measures.
President Akufo-Addo in his economic recovery speech on Sunday, October 30, 2022, assured that government does not intend to slash the returns made on investments in its negotiations with the International Monetary Fund(IMF).
But addressing the media on Tuesday, November 1, 2022, the Minority Leader, Haruna Iddrisu insisted that there will be some form of cuts in investments in the coming days.
Mr. Iddrisu accused the president of creating the current economic mess the country currently finds itself in.
“As a Minority group, we believe the president failed to accept responsibility [during his address] that he is responsible for the sorry state of the Ghanaian economy, and he is responsible for the wrench economy which has consequences on livelihoods. Poverty has exacerbated, cost of living has gone high, cost of doing business has gone high, many businesses are folding up, and some industries are now re-routing their investments into neighbouring Ivory Coast and other countries because Ghana is no longer the investment haven as it should be.”
He also alleged that considering the happenings and conditions that come with seeking an IMF facility, haircuts on investments are inevitable.
“We are giving you only 14 days from today, and you will hear from them publicly efforts to restructure our unsustainable debt, and those efforts will necessarily include a sika mpɛ dede baba [mallam] for many persons who have investments and savings in some instruments.”
“Those of you who listen to [Kristalina] Georgieva of the IMF, you will recall a few months ago when the World Bank and the IMF, particularly led by its Managing Director, were again categorical that they didn’t see anything wrong with Government policy. We now state that there is everything wrong with Nana Addo Dankwa Akufo-Addo’s government and his economic management team’s policy on borrowing. Borrowing is a policy. You decide to borrow and how much to borrow and where to direct the borrowing. So if you now borrow to the level of debt distress, to the level of unsustainable debt, to the level that you are now talking about ratio of 105% of GDP as your debt level and then he Nana Addo Dankwa Akufo-Addo, the president of the Republic added that he hopes that Ghana’s debt to GDP will improve to 55% by 2028, we ask the question, where will he be?”
Amid the calls for his resignation, Finance Minister’s predicament has courted him sympathisers in certain quarters of the business community.
Majority Leader, Osei Kyei-Mensah-Bonsu has revealed that when some of the Majority MPs called for Mr. Ofor-Atta’s dismissal, one of Ghana’s wealthy businessmen approached them to plead on behalf of the Minister.
In an interview with JoyNews, the Majority leader explained that in the heat of the arguments in Parliament, the said businessman met some of the legislators and “tried to do something.”
He fell short of stating what exactly the move was nor the form it took.
“I’m told on authority that some businessman came here and tried to do something,” he told Evans Mensah.
The Suame MP insisted that it was meant to help persuade the members of the house against nudging the Minister out of office.
“I was told that he came here and tried to mediate in his own way what he thinks the problem is,” he said.
He further narrated that “he was repelled by the people and told he was told not to involve himself. So he went away.”
This revelation was made in a yet-to-be-aired interview on PM Express on JoyNews.
“If that is the case I want to talk to that man and know his motive. But people could also be indulging in speculation. So we want to hear him to see what it is… Did he come here?… did he come with any inducement? What was the motivation? Not having heard him, I don’t want to prejudge.”
According to Osei-Kyei-Mensah Bonsu, the man in question is a known figure in the business community who has his own way of dealing with both sides of the political divide.
The Finance Minister is the subject of criticism for what many say is a lost grip on the economy.
Ken Ofori-Atta is at the doors of the International Monetary Fund (IMF) seeking a bailout to prevent a further slump.
He holds a different opinion from President Nana Addo Dankwa Akufo-Addo, who in his speech to the nation on Sunday, October 30, unequivocally affirmed that investors’ cash in various public projects would not be lost.
As the administration works to reach an agreement with the International Monetary Fund, the president underlined that measures would be made to safeguard citizens’ investments (IMF).
“I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations. There will be no ‘haircuts’ so I urge all of you to ignore the false rumours, just as, in the banking sector cleanup, government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits,” President Akufo-Addo said.
But speaking on Accra-based Joy FM, the Ranking Member on Parliament’s Finance Committee, indicated that there would definitely be a ‘haircut’ as Ghana awaits a bailout from the IMF.
“I don’t know the basis the President made that statement and if you run the maths, it doesn’t add up and I will be surprised that Ghana will get an IMF programme without a haircut.
“I can say on authority that there would be some form of a haircut. Clearly, someone is not briefing the President properly or probably the writing did not come out well. ‘The President goofed’, he shouldn’t have said it in a categorical manner because what it has done is that, it has sent additional uncertainties to the market clearly indicating that someone is not on top of his job.
“I do not know how our debt will be sustainable by the year 2028 brings to over 100 per cent…clearly indicating that we are to [remove] 50 per cent of debt without a debt restructuring, it is impossible,” Dr. Ato Forson explained.
The cedi’s dark days appear to be over, at least until the end of the year, with market movements over the last week. There is a showing sign of sustained recovery that could bring major relief to traders, market players including bankers and ordinary citizens who only crave stability in the currency regime.
The local currency, which traded as high as GH¢15 to the USD some two weeks ago on the interbank markets and almost GH¢16 on the retail market has made some gains after several regulatory and government interventions. The cedi is currently trading between GH¢13- GH¢14 on both markets.
According to Ashley Thompson-MacCarthy, The Executive Director at Obsidian Achernar Limited, a leading Financial Services and Africa-Focused firm, events from last week and the beginning of this week, coupled with the advanced nature of negotiations with the International Monetary Fund (IMF) for a programme, shows that the worst of the depreciation is over, and Ghanaians can look forward until at least the end of the year with some optimism about the currency.
“We believe that the worst is over, and the currency will strengthen against the greenback (US Dollar). We will see prices stabilise and even appreciate to the levels of GH¢11.5 to US$1. That is what we believe,” he said, sounding highly optimistic.
“We think the currency is undervalued due to perception that we do not have a structured economy. And we have seen prices across bond yields reflect that lack of confidence. However, in the last week or so, we have seen bond yields drop marginally. And we believe this is a sign of things to come,” Mr. Thompson-MacCarthy noted.
Last week, the Central Bank revoked the licences of some forex bureaux which have been flouting sections of the Foreign Exchange Act. Also, black market operators who have no licence are being clamped down. In addition to these moves, the Bank of Ghana announced the receipt of more than a US$1billion in forex via a loan from Afreximbank and the first tranche of the cocoa syndicated loan.
These moves have calmed the markets and has seen individuals and corporates which have been hoarding the US currency as a store of value begin to release their dollars.
“Some weeks ago, there was an unusual high demand for dollars by people who ordinarily would not be demanding dollars. This led to the rapid deprecation but the moves by the regulator have changed the mood and over the past seven days, we have seen a flush of USD on the market,” he added.
“The retracement of cedi’s free fall is also bringing back international investors into our market. On the talks that the United States are going into a recession, these international investors are looking for yields, they are looking for where to invest and we see that Ghana is undervalued.
Typically, when countries enter into an IMF programme, we should see the currency stabilise and so we are going into that period where we believe that the worst is over. Whereas if you look at the West, especially a country like America, its Dollar Price Index, dropped from 113 to as low as 109. Today it is stabilising around 111. This shows that there is volatility in America.
“Having a well-diversified investment portfolio is strategic. We believe that a major part of the gains from keeping cash dollars have been crystallized on our market. As the dollar begins to weaken globally, it will be good to take advantage of other asset classes like Government bonds that are heavily discounted and make a good entry. Also, there are options like commodities, property and real estate markets that provide leverage that is currently untapped in our country,” he added.
December in GH
With the Year of Return raking in almost US$2billion in 2019, according to official data, the government has introduced a comprehensive December in GH plan that seeks to make Accra and Ghana the holiday destination of Africa. With the worst days of the pandemic over, this December primes to be a gamechanger.
This, Mr. Thompson-MacCarthy believes would also bring in some good FX to support the local currency. “Our biggest asset, which we do not talk about much is peace. The fact that we have political stability means we can attract foreign investment and tourism opportunities that bring in very good FX for the economy. We must cherish this and make it a mainstay of the economy.”
The authorities should endeavour to make sure that the impending FX from the end-of-year activities are routed through regulated channels, he added.
As Ghana considers some debt restructuring, the Information Minister, Kojo Oppong-Nkrumah, has clarified that the president’s assurances of no haircuts with respect to money invested in bonds cover just the principals for the time being.
“My understanding is that no principals will be touched. No principals will have a haircut,” Mr. Nkrumah said on the Citi Breakfast Show.
The minister however added that “the debt sustainability strategy is yet to be announced in full.”
“When they are done with the rest of the strategy, and they come out and do a full announcement, we will have clarity on the form that the debt restructuring will take,” he said.
The concerns over debt restructuring have accompanied the government’s negotiations with the International Monetary Fund (IMF) for a $3 billion bailout.
As to the fate of interest expected on the principals, Mr. Nkrumah said, “I think we should give them time to come out and announce the full details of the debt sustainability strategy.”
The minister further said the president’s assurances, which came via an address on Ghana’s economic crisis, were in response to rumours about haircuts on principals.
Ghana’s talks with the IMF mission are expected to resume in the coming weeks as the government works to manage its almost GHS 400 million debt.
Moving forward, to address the debt situation, the president said the government plans to reduce the total public debt to GDP ratio to about 55 in present value terms by 2028, with the servicing of external debt pegged at not more than 18 percent of annual revenue also by 2028.
It is expected that the government will have to restructure the debt to make it more sustainable in order to qualify for the $3 billion support from the IMF.
The Finance Ministry recently said it is committed to reaching an agreement with the IMF as soon as possible.
The government is optimistic that it will have a deal in place before the 2023 budget is read next month.
In the midst of negotiations with the International Monetary Fund for a financial bailout, “I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in Government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations.”
“There will be no ‘haircuts’, so I urge all of you to ignore the false rumours, just as, in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits,” he added.
Meanwhile, President Akufo-Addo has hinted that Ghana could be securing an agreement with the International Monetary Fund by the end of year.
“We are working towards securing a deal with the IMF by the end of the year. This will give further credence to the measures Government is taking to stabilize and grow the economy, as well as shore up our currency,” he noted.
He further explained that the funds will “repair the short term of public finances and restore our balance of payment whiles we continue to work on the medium to long term structural changes that are at the heart of our goal of constructing a resilient robust Ghanaian economy and building a Ghana Beyond Aid.”
has reassured Ghanaians that their deposits and investments are safe.
Contrary to claims made by some, he stated that there would be “no haircuts” on investments and asked the people to dismiss the aforementioned stories.
On October 30, President Akufo-Addo promised investors and the broader public that their cash would be safe and secure throughout the IMF talks, which are aiming to raise $3 billion.
“I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in Government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations.”
“There will be no ‘haircuts’, so I urge all of you to ignore the false rumours, just as, in the banking sector clean-up, Government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits,” he added.
Meanwhile, President Akufo-Addo has hinted that Ghana could be securing an agreement with the International Monetary Fund by the end of year.
“We are working towards securing a deal with the IMF by the end of the year. This will give further credence to the measures Government is taking to stabilize and grow the economy, as well as shore up our currency,” he noted.
He further explained that the funds will “repair the short term of public finances and restore our balance of payment whiles we continue to work on the medium to long term structural changes that are at the heart of our goal of constructing a resilient robust Ghanaian economy and building a Ghana Beyond Aid.”
President Nana Addo Dankwa Akufo-Addo has taken a swipe at his critics over the ongoing negotiations by his government to secure an enhanced domestic programme (EDP) from the International Monetary Fund (IMF) for the country.
The programme is expected to repair, in the short term, the defects of the 2022 budget, which is said to have been thrown out of gear owing to the global economic crises occasioned by the Russia-Ukraine war.
Some critics, notably economist Kwame Pianim, have taken on the government about its commitment to the negotiations, claiming they are not going well.
“The IMF negotiation is not going well [and] I know this for a fact,” Mr Pianim had stated last week in an interview with TV3‘s Paa Kwesi Asare.
He called for the sacking of the Minister of Finance, Ken Ofori-Atta, whom he described as without credibility to lead negotiations with the Fund, precisely because he did not support the idea of going there in the early stages.
“What the IMF is waiting for is a bold, credible pronouncement from the president as he did over the Covid.”
The latter the President did on Sunday, October 30 but during his national broadcast, he stated emphatically that the negotiations are going well.
“I am able to report to you, my fellow Ghanaians, that the negotiations to secure a strong IMF Programme, which will support the implementation of our Post COVID-19 Programme for Economic Growth and additional funding to support the 2023 Budget and development programme, are at advanced stages, and are going well.”
President Akufo-Addo assured that when a deal is hopefully reached by the end of the year, his government’s economic measures will be further given credence.
“We have gone to the Fund to repair, in the short term, our public finances, and restore our balance of payments, whilst we continue to work on the medium to long-term structural changes that are at the heart of our goal of constructing a resilient, robust Ghanaian economy, and building a Ghana Beyond Aid.”
After months of mounting demand to speak during an economic crisis, President Nana Addo Dankwa Akufo-Addo is today addressing the country on economic issues.
The speech follows a three-day emergency Cabinet meeting held at the Eastern Region’s Peduase Lodge to discuss, among other things, the depreciation of the cedi, the status of talks over a program with the International Monetary Fund, and the soaring costs of food and other necessities.
The government has taken steps to help Ghanaians who are suffering from extreme economic challenges, and the president is scheduled to reveal these.
President Akufo-Addo in his recent commentary on the economy has admitted that ‘times are tough’ and that the government will be exploring ways and means to bring relief to Ghanaians.
Ahead of the president’s address, Information Minister and Member of Parliament for Offoase Ayirebi, Kojo Opong-Nkrumah has said that Akufo-Addo has taken key decisions aimed at rebooting the economy.
The government and the International Monetary Fund are currently negotiating a package to help the economy, according to renowned economist and senior statesman Kwame Pianim.
In an interview with Accra-based TV3, he claimed that President Akufo-Addo and his troubled Finance Minister, Ken Ofori-Atta, were primarily to blame for the current state of affairs.
The IMF, he said, was looking to Akufo-Addo to make a definitive pronouncement on the crisis. To own it and take critical steps to cure the issues before they come in with their support. Ofori-Atta’s continued stay in office despite removal calls, he added, was not helping issues.
“It is not going well, the negotiations. I know that. That is my business, to keep my ears open, I am a Ghanaian, and I am interested in the economy moving in the right direction.
“We have friends in Washington so what I am saying is that it is not going well,” he said
But, the ministry in a statement issued Sunday, October 30, said that such statements are false.
“The Ministry notes that in recent days, a number of persons have been making false claims about the ongoing negotiations with the International Monetary Fund (IMF or the Fund)
“These include: that the negotiations are not going well because the Fund does not see any seriousness on the part of the government; that the government does not have a programme for consideration by the IMF; that officials of the Fund have discovered inaccuracies in the macroeconomic figures presented by the government’s Economic Management Team.
“The allegation that the negotiations are not going well is categorically untrue. The IMF itself has on numerous occasions stated unequivocally that negotiations are progressing well, and affirmed that both parties are fully committed to reaching a deal as soon as feasible,” parts of the statement by the ministry read.
The Ministry of Finance has denied claims that the government’s current negotiations with the International Monetary Fund for a bailout have been difficult.
The government and the International Monetary Fund are currently negotiating a package to help the economy, according to renowned economist and senior statesman Kwame Pianim.
In an interview with Accra-based TV3, he claimed that President Akufo-Addo and his troubled Finance Minister, Ken Ofori-Atta, were primarily to blame for the current state of affairs.
The IMF, he said, was looking to Akufo-Addo to make a definitive pronouncement on the crisis. To own it and take critical steps to cure the issues before they come in with their support. Ofori-Atta’s continued stay in office despite removal calls, he added, was not helping issues.
“It is not going well, the negotiations. I know that. That is my business, to keep my ears open, I am a Ghanaian, and I am interested in the economy moving in the right direction.
“We have friends in Washington so what I am saying is that it is not going well,” he said
But, the ministry in a statement issued Sunday, October 30, said that such statements are false.
“These include: that the negotiations are not going well because the Fund does not see any seriousness on the part of the government; that the government does not have a programme for consideration by the IMF; that officials of the Fund have discovered inaccuracies in the macroeconomic figures presented by the government’s Economic Management Team.
“The allegation that the negotiations are not going well is categorically untrue. The IMF itself has on numerous occasions stated unequivocally that negotiations are progressing well, and affirmed that both parties are fully committed to reaching a deal as soon as feasible,” parts of the statement by the ministry read.
He asserted that no one is untouched by the current economic crisis and that everyone must contribute to restoring some degree of stability to the economy as the cedi’s sustained devaluation further erodes investment assets and trust.
“All of us must contribute because as the cedi declines, our companies’ external value decreases.
To prevent destroying our assets every three to four years, we should all work to maintain stability, he stated.
He spoke during the 25th-anniversary lecture and dinner of the Public Utilities Regulatory Commission (PURC) in Accra and added that for an institution like PURC, its work is almost impossible without relative microeconomic stability.
The country is currently grappling with runaway inflation of more than 37 percent and rising as prices of basic commodities continue to spiral.
The cedi has also depreciated over 50 percent against the United States dollar, while public sector debt – expected to reach 104 percent of GDP by year-end, according to the World Bank – has been described as distressing by rating agencies.
Explaining how these macroeconomic indicators affect Ghanaians, Mr. Pianim said had the cedi been stable, for instance, the Teachers Fund – a retirement supplement and solidarity scheme for the Ghana National Association of Teachers – would now have been a billion-dollar investment.
Meanwhile, in a bid to restore economic stability, government has been engaging the International Monetary Fund on a bailout programme.
The mooted U$3billion balance of payment programme, if concluded, according to government, will put the economy back on the trajectory of growth.
Many analysts and economists, however, hold the view that IMF intervention will only provide temporary relief.
They believe that cutting down the size of government and non-capital public expenditure, efficient revenue mobilisation, transparent and value-for-money use of taxpayer’s funds, as well as a well-thought-out export strategy, could provide much more viable and enduring solutions.
Building a strong, independent PURC
The PURC regulates power and water utilities in the country.
“We need you to continue being strong, do the work the way it should be done and stand up for what you believe in,” Mr. Pianim, who served as PURC’s board chair between January 2003 and March 2008, further noted.
He warned that failure to do this could derail the gains that have been made and usher in another era of legacy debts.
He further charged the Commission to take measures that safeguard water quality, especially in the face of the galamsey menace.
“In two decades to come, water is going to be a scarce commodity in the world; countries will fight over water. Let us start protecting ours now.”
For his part, Board Chairman of the PURC, Ebo Quagrainie, noted the steps are being put in place to transform PURC into a modern-day utility regulator.
Among them are included enhancing transparency and accountability and the establishment of a Centre of Excellence in Public Utility Regulation.
The Centre – to be set up in partnership with the Ghana Institute of Management and Public Administration, Mr. Quagrainie explains, will contribute to capacity building in the field of utility regulation on the continent when established.
The anniversary lecture and dinner was themed ‘25 Years of independent utility regulation in an emerging economy: Positioning PURC as a model of excellent utility regulation on the continent’.
It brought together past and current staff, former board members and industry experts to celebrate the Commission’s achievements and contributions since its establishment in 1997.
Participants included the Omanhene of Asante Asokore, Nana Susubribi Krobea Asante; Co-Founder and Executive Partner of Arthur Energy Advisors, Harriette Amissah-Arthur; Executive Director of Institute for Energy Policies and Research, Kwadwo Nsafoah Poku; and Board Chairman of United Bank for Africa (Ghana) Limited, Kweku Awotwi.
Following a three-day cabinet retreat, Nana Addo Dankwa Akufo-Addo has decided on crucial measures to restart the economy, according to the information minister, ahead of his much anticipated October 30 economic talk.
Kojo Oppong-Nkrumah stated that the choices took into account interactions with different economic actors as well as suggestions from the current negotiations with the International Monetary Fund.
He said that the choices made would ultimately address the nation’s economic problems.
“This follows a week of interactions with various economic actors and inputs from the IMF negotiations so far. Tomorrow evening we start the exercise of rebooting as the Prez outlines measures. #ResolvingTogether,” Oppong-Nkrumah tweeted on Saturday, October 29, 2022.
President Nana Addo Dankwa Akufo-Addo last Wednesday concluded consultations with economic players ahead of the three-day Cabinet retreat to resolve the pressure on the economy and the rising cost of living, GNA reported.
The consultations, which started on Tuesday at the Jubilee House, Accra, were to enable the government to get the players up to speed with measures being adopted to mitigate current economic challenges and to get their buy-in to those arrangements.
Top issues that were discussed over the two-day period included updates on the government’s economic programme with the International Monetary Fund (IMF), the depreciation of the Cedi, and the collaborative effort needed to get the economy back on track.
Some eight stakeholders, including the Association of Ghana Industries, the Ghana Association of Banks, Transport Operators, Forex Bureau Association of Ghana, Market Women, the Ghana Employers Association, the Private Enterprise Federation, and the Trades Union Congress held “candid” discussions with the President and his economic management team.
In an effort to aid the nation out of its current economic difficulties, former president John Dramani Mahama advises the government to reduce spending by lowering the number of appointees, disband or realign state entities with identical functions, and halt non-essential projects.
He questioned the need for the Free SHS Secretariat given that the Ghana Education Service could carry out the policy just as well.
Speaking at a gathering titled “Building the Nation We Want,” the former president urged the government to take more action to fight corruption.
Mr. Mahama said the incompetence of the Finance Minister and the entire Akufo-Addo government has caused the depreciation of the Cedi and other economic challenges in the country.
The former President said it is not acceptable for Mr. Ofori-Atta to continue to be in office supervising the 2023 budget and the completion of Ghana’s negotiations with the International Monetary Fund.
Mr. Mahama was optimistic that the economy will get better and urged Ghanaians to unite and consume locally produced foods as a way of supporting the economy.
The 2023 National Budget, which will be put up to Parliament for approval in November 2022, would reportedly incorporate the agreements negotiated with the International Monetary Fund (IMF) for the bailout it is requesting.
After early talks, the IMF stated that Ghana’s government only needed to demonstrate that its debt level is manageable in order to receive the rescue it is seeking.
Bright Simons, vice president of IMANI Africa, and other analysts have hinted that it will be extremely difficult for the government to reach an agreement with the IMF before the budget is presented in the following three weeks.
Renowned economist and statesman, Kwame Pianim, has said that the information he has indicates that the bailout negotiations are not going well.
This is the time the country needs someone like the Asantehene, Otumfuo Osei Tutu II, whose intervention, according to former President John Dramani Mahama, was critical to Ghana getting an IMF programme in 2015.
Mahama, in February 2022, said that he called on Otumfuo Osei Tutu to enquire from him whether he could get his friend, the then President of the World Bank, James D. Wolfensohn, to work on the IMF programme for the government, and the Asantehene readily accepted the request.
“Because of that programme, he (Otumfuo) flew to Washington to have talks with Mr. Wolfensohn, who, together with Otumfuo, went and spoke with the IMF Director, Madam Christine Lagarde, and within a short period of time, we had the Extended Credit Facility,” the ex-president said.
To date, the Otumfuo has not commented on the current IMF negotiations the government is having, probably because it has refused to call for a national dialogue on the current economic crisis like the one Mahama’s administration had in 2014.
“If the Akufo-Addo government needs the IMF bailout as it has indicated to help turn the economy around them it has to start bringing people like Otumfuo on board,” the former president said.
The President has been petitioned to remove Charles Adu Boahen, the Finance Minister and the Minister of State in the Finance Ministry, by more than eighty (80) New Patriotic Party lawmakers.
But in a meeting with the disgruntled MPs, the President advised them to hold off until Mr. Ofori-Atta signed the agreement for Ghana to receive financial aid from the International Monetary Fund (IMF).
Tackling the issue during Peace FM’s “Kokrokoo” morning show, Charles Owusu took the President’s assurance to the MPs with a pinch of salt.
According to him, the President’s statement is just “a nice way to tell the Parliamentarians that I have listened to you but I won’t do it”.
“If the 2024 elections are held and the NPP wins, will Mr. Ken Ofori-Atta continue to be the Finance Minister of Ghana?…Someone who has been in government for six (6) good years, if he couldn’t do everything he must do in 6 years, what can he do in three (3) weeks?…What change will three weeks bring?”, he asked.
Charles Owusu couldn’t “understand why it should be difficult” for the President to remove Ken Ofori-Atta “when Ghanaians and members of his party are calling for the removal of this man” as he stressed, “this country will still be governed should Akufo-Addo die today”.
Making reference to a biblical account of the freedom of the people of Israel from Egypt, he cautioned President Akufo-Addo not to harden his heart concerning the calls for removing the Finance Minister.
“Pharoah hardened his heart not to let the people of God go and his end resulted in death”, he warned the President.
In an effort to aid the nation out of its current economic difficulties, former president John Dramani Mahama advises the government to reduce spending by lowering the number of appointees, disband or realign state entities with identical functions, and halt non-essential projects.
He questioned the need for the Free SHS Secretariat given that the Ghana Education Service could carry out the policy just as well.
Speaking at a gathering titled “Building the Nation We Want,” the former president urged the government to take more action to fight corruption.
Mr. Mahama said the incompetence of the Finance Minister and the entire Akufo-Addo government has caused the depreciation of the Cedi and other economic challenges in the country.
The former President said it is not acceptable for Mr. Ofori-Atta to continue to be in office supervising the 2023 budget and the completion of Ghana’s negotiations with the International Monetary Fund.
Mr. Mahama was optimistic that the economy will get better and urged Ghanaians to unite and consume locally produced foods as a way of supporting the economy.
The economist and former chair of the finance committee asserts that short-term investors’ investments are safeguarded by law, negating the need for investors to hastily sell their bonds.
The unpredictability of Ghana’s economic recovery has recently hurt the Treasury Bills Market. The planned debt restructuring process is mostly to blame for the market’s unease.
The mad rush for cash is having a toll on banks, affecting their balance sheets and capital adequacy requirements.
But Dr. Assibey-Yeboah in a tweet assured short-term investors that they are protected by law, and will not suffer under any debt restructuring exercise.
“Your short-term government bill (91-day, 182-day, etc) cannot be touched in a debt restructuring as per international law. Rest easy.” He stated.
The government of Ghana is currently engaged in negotiations with the International Monetary Fund, (IMF) for a program that could see the country receive about $3 billion from the fund under a 3-year program.
The government is hopeful of clinching a deal before the end of 2022 to restore investor confidence in the economy.
According to the Bank of Ghana, Ghana’s public stock debt stock reached GH402.4 billion in July 2022, or 68 percent of GDP.
John Mahama is of the opinion that the government must approach the debt restructuring process in a way that addresses both domestic and external debt components, even if the World Bank has predicted that the percentage will reach 104 percent by the end of 2022.
Although the figure has been projected by the World Bank to reach 104 percent by end the of 2022, John Mahama believes government must conduct the debt restructuring exercise in a manner that covers both domestic and external debt components.
Speaking at a public lecture on Ghana’s economy on October 27, the former president said the current economic conditions have since left many Ghanaians suffering with severe erosion of indigenous capital.
“For us in the NDC, our position is that any debt restructuring must not place the absolute burden on only the domestic debt. Restructuring of our debt must cover both domestic and external debt,” he stated.
He further pointed out the impacts of the banking sector clean-up exercise which he believes has resulted in job losses and erosion of capital for many Ghanaian businesses and families.
It is for this reason, John Mahama wants government to conduct a proper debt restructuring exercise amid ongoing negotiations with the International Monetary Fund for a bailout.
“Any debt restructuring restricted to cover only domestic creditors would lead to a further erosion of local savings and capital and would also severely weaken the Ghanaian banking sector,” John Mahama stressed.
Meanwhile, Global investment bank and financial services firm, JP Morgan has warned Ghana’s potential debt restructuring exercise could further weaken the position of the local currency.
JP Morgan in a recent Emerging Market Quick Take touching on the recent performance of the Ghana Cedi, it attributed the decline to the Bank of Ghana’s decision to purchase dollars from mining and oil companies, inadvertently reducing forex availability within the inter-bank market.
The global investment bank further attributed the loss of confidence in the domestic economy, which it believes has drained FX reserves and resulted in volatility.
Inflation in the country was estimated by the Ghana Statistical Service to be 37.2% in October of this year, while interest rates were estimated to be around 33%.
In addition, the Bank of Ghana in October this year hiked the Monetary Policy Rate by 250 basis points from 22 percent to 24.5 percent to contain soaring inflationary pressures.
But Standard Bank in its September 2022 African Markets Revealed report said the BoG MPC will have to factor in elevated underlying inflationary pressures at its November meeting as well as second-round impacts of weaker cedi which has been experiencing persistent depreciation.
“Still, the MPC sees a potential International Monetary Fund deal as beginning to address fiscal challenges, thereby helping to anchor inflation expectations. Furthermore, the MPC is still working with mining firms to find a structure to enable them to boost the FX (foreign exchange) reserves via direct FX sales from this large export-earning sector,” the report said.
Touching on Ghana’s inflation outlook, the report outlined figures could ease from October to November this year but pointed out it could remain in double digits until at least August 2023.
“However, should negotiations with the IMF prove protracted, foreign portfolio outflows may burgeon amidst a still volatile global risk environment, placing further upward pressure on US dollar/Ghana cedi, as well as keep inflation stickier than we currently anticipate,” the report added.
Focusing on Ghana’s treasury yields, the report noted, “Nothing much implies that yields at the shorter end of the curve will ease over the next 4 months or so. Indeed, with headline inflation likely elevated for most of half year 2023, Treasury bill yields may prove sticky.”
Bank of Ghana Governor, Dr. Ernest Addison, has expressed commitment to restoring order and bringing stability to the country’s foreign exchange market through stringent measures.
According to him, despite disruptions in the general economy across the world, coupled with inflationary pressures, demand-supply imbalances, and uncertainties in the financial markets among others, the central bank is poised to collaborate with relevant stakeholders toward stabilizing the foreign exchange market.
Speaking during a meeting on October 26 with stakeholders within the foreign exchange market, heads of banks and the Association of Forex Bureau Operators, Dr. Addison underscored the importance of sanitizing the market to address shortfalls and curtail the cedi’s decline.
“Available data indicate that we started the year GH¢6 to the dollar. It got to GH¢7 and we stayed at GH¢7 in June, GH¢7.6 in July, GH¢8 in August, GH¢9.6 in September and now it is GH¢12.5. But we are here again with people sending messages that the dollar-cedi rate is GH¢15 to a dollar,” he noted.
“Clearly, this type of movement does not reflect changes in the fundamentals. It is clear that the market is not functioning properly. We are seeing speculations taking over under very disorderly market conditions and it appears now the black market is rather driving exchange rates. This we cannot allow to continue,” the BoG Governor added.
Touching on measures to reduce soaring inflation rates in Ghana, Dr. Addison said the central bank will continue to adopt tightening of monetary policy to prevent inflation from being entrenched.
He however pointed out that monetary policies should be complemented with fiscal policies for every economy.
Dr. Addison however admitted to recent developments in terms of liquidity in the banking sector but indicated that the Central Bank currently has some liquidity in place.
“I am aware of the recent developments in terms of liquidity in the banking sector. As I said, I took note of the advice from Washington on the financial stability issue that there has to be targeted liquidity support to preserve financial stability without undermining the inflation control objectives. So, this is really the context we should have the discussion on all the complaints of we need liquidity and BoG not supplying liquidity,” the BoG Governor explained.
“As we are all aware, we got the $750 million from the AfriExim Bank and I think on [October 26, 2022], we are supposed to receive the $790 million from the COCOBOD syndicated loan so the Central Bank has some liquidity.”
“We have enough liquidity to keep things relatively stable till the International Monetary Fund Programme kicks in and the financing assurances expected from other partners come in,” he added.
He continued, “I recently met the CEOs of banks and I have assured them that we will provide the necessary liquidity to ensure that we do not have a banking system with a liquidity problem and we have to do that within the context of keeping inflation low.”
Debt sustainability concerns
Meanwhile, the leadership of banks present during the engagements blamed the development on the rapid depreciation of the cedi against the US dollar on a wide range of issues.
They prominently attributed the challenges to uncertainties surrounding the future of Ghanaian bonds especially.
The heads of banks also said the ongoing negotiations between government and the International Monetary Fund (IMF) have fueled certain speculation over Ghana’s debt sustainability position and forced some banks to begin cutting losses and moving their investments into safe havens.
To address the situation, they urged the Bank of Ghana to employ adequate mechanisms to regularise forex brokers in a way that would ensure their efficient supervision and prevent the sale of foreign currencies at exorbitant prices.
The BoG Governor in his response assured stakeholders it was adopting measures to address challenges in the financial sector and particularly restore order in the forex market.
“We are going to this by making sure the interbank market took full control of the forex market to enforce regulations surrounding forex trading so as to streamline the supply of forex in the country.”
Former President John Mahama is perplexed as to why the current administration, which asserts that it “has the guys,” is focusing the IMF negotiations and the 2023 budget presentation on “one individual.”
His remarks follow a meeting between President Akufo-Addo and the majority caucus, which was called in response to their demand that Finance Minister Ken Ofori-Atta be fired.
You may recall that nearly 80 NPP MPs asked for the dismissal of Charles Adu Boahen, the Finance Minister, and the Minister of State in the Ministry of Finance, for their failure to address the current economic situation.
But in a meeting on Tuesday, the President asked that Ofori Atta be allowed to conclude talks with the International Monetary Fund (IMF) and also present the 2023 Budget Statement of government in November.
Speaking to this at a lecture on the economy on Thursday, Mr Mahama described this as “untenable”.
“Budget preparation and IMF negotiations are the result of teamwork, not the work of one individual. I fail to see how the absence of the Minister will affect the preparation of the budget or the negotiations with the Fund”.
He continued: “There surely must be persons with the requisite experience to carry on this work. After all, what happened to the “We have the men” mantra?”
The majority caucus in parliament has reversed course and stated that it completely supports Finance Minister Ken Ofori-Atta in his decision to remain in office until President Nana Akufo-Addo decides to act on the caucus’ prior call for the minister to be fired.
On Thursday, October 27, 2022, Deputy Majority Whip Habib Iddrisu made the following statement to the media: “At the end of the day, we all came to the conclusion that we have agreed to the request of the president” for the caucus to grant Mr. Ofori-Atta permission to complete his talks with the International Monetary Fund (IMF), as well as to present the 2023 budget in November of this year and finally move the motion for the approval of the appropriation bill.
“So, the entire majority caucus agreed to the request of the president to allow the finance minister to continue with the negotiation with the IMF and also the request of the president to make the finance minister present the 2023 budget”, he said.
Mr Iddrisu added: “So, because of that the leadership, led by the majority leader, Hon Kyei-Mensah-Bonsu, led a delegation yesterday – I was part of it – and we communicated to the president that his request has been accepted by the majority caucus and that we allow that the finance minister should continue with the negotiations with the IMF, the finance minister should come and present the 2023 economic statement and budget of the president of the Republic of Ghana and also, to move the motion for the appropriation bill”.
“So, at the moment, the entire majority caucus, the 138 of us, are all behind the finance minister to continue with the negotiations with the IMF, to come and read the budget statement to us and also move the motion for the approval of the appropriation bill for the 2023 budget. So, that is the stand now”, he indicated.
“The statement has been made clear that: ‘Yes, we do respect our president, we have heard the request and appeal of the president and the majority caucus is fully behind the finance minister”, he stressed.
The caucus, led by spokesperson Andy Appiah Kubi, MP for Asante Akyem North, issued the ultimatum within the precincts of parliament on Tuesday, 25 October 2022 when the house resumed sitting after a long recess.
He told the parliamentary press corps: “We are members of the majority caucus of the parliament of Ghana and we, here so, present; represent a greater number of the said caucus”.
“My name is Andy Appiah Kubi and I am only here as the spokesperson for the majority group – without more”, he caveated.
Mr Appiah-Kubi continued: “We have had occasions to defend allegations of conflict of interest, lack of confidence [and] trust against the leadership of our finance ministry”, however, “the recent developments within our economy are of great concern to the greater majority of the members of our caucus and our constituents”.
“We have made our grave concerns [known] to the president through the parliamentary leadership and the leadership of the party without any positive response”, he revealed.
“We are, by this medium, communicating our strong desire that the president change the minister of finance and the minister of state at the finance ministry, without further delay, to restore hope to the financial sector and reverse the downward trend in the growth of the economy”, the group demanded.
“The summary of our concerns lead to a plea that the Minister of Finance, Mr Ken Ofori-Atta and the Minister of State at the Ministry of Finance, Mr Charles Adu-Boahen, be removed from office. We pray that this prayer would be carried to the presidency”.
The caucus then threatened: “Meanwhile, we want to serve notice, and notice is hereby served that until such persons, as aforementioned, are made to resign or removed from office, we, members of the majority caucus here in parliament, will not participate in any business of the government by or for the president by any other minister”.
“We hope that those of us at the backbench and members of the majority caucus will abide by this prayer”, the group added.
“We are saying that if our request is not responded to positively, we will not be present for the budget hearing nor will we participate in the debate”, Mr Appiah-Kubi stressed.
Also, the Alliance for Accountable Governance (AFAG) had demanded that President Akufo-Addo reassign Mr Ofori-Atta and Mr Adu Boahen if he cannot dismiss them.
The pro-government pressure group said in a press statement that the two ministers are to blame for the poor performance of the Ghana cedi in relation to other international trade currencies.
“The Minister of Finance and the Minister of State at the Ministry, Ken Ofori-Atta and Charles Adu Boahen, must be reassigned,” the group demanded.
AFAG’s demand came a few days after media personality and comic Kwaku Sintim-Misa, alias KSM, asked Mr Ofori-Atta to resign.
He said this in a tweet where he claimed to be giving advice to Mr Ofori-Atta.
The award-winning comic posited that President Nana Akufo-Addo, who is cousins with Ken Ofori-Atta, has no desire to sack him from office for a more competent person to assume it, even though it is the best for Ghana’s ailing economy.
“Advice to Ken Ofori-Atta. Bra [brother] Ken, it is obvious the President cannot and will not fire you,” Mr Sintim-Misa began.
“Please do him and Ghana a favour and respectfully resign for a competent financial manager to take charge,” he advised.
According to the TV show host, the resignation of the Finance Minister will be followed by restored confidence in Ghana’s economic recovery.
“I am sure that the financial markets will react positively to the news,” is how he put it.
Also, another entertainment personality, Lydia Forson, recently said: “It makes absolutely no sense that Ken Ofori-Atta is still the finance minister,” and queried: “How?”
“He’s lost the confidence of the people!” she argued.
The clamour for Mr Ofori-Atta’s head come on the back of the cedi’s very poor performance against the US dollar.
Bloomberg has named the Ghana cedi as the worst-performing currency in the world.
At the time of KSM and Lydia Forson’s tweets, one needed more than 15 cedis to obtain a dollarin Accra, the capital of Ghana.
Recently, the United Kingdom’s Finance Minister Kwasi Kwarteng was sacked and subsequently their Prime Minister, Liz Truss, also resigned.
A section of the Ghanaian public have asked why this is not common in Ghana.
President Nana Akufo-Addo, last week, said Mr Ofori-Atta has been an excellent handler of the Ghanaian economy and, thus, sees no reason to sack him as being clamoured for by his critics.
Speaking to OTEC FM in the Ashanti Region on the first day of his four-day official working tour of that part of Ghana, Mr Akufo-Addo parried criticisms that his cousin is to blame for Ghana’s return to the International Monetary Fund (IMF) for help since he mismanaged the economy.
The president said he takes full responsibility for Ghana’s return to the IMF since he took the decision as the head of state.
He argued that the same Ofori-Atta was able to manage an IMF-programmed economy that the New Patriotic Party (NPP) inherited in 2017 to become one of the fastest-growing economies in the world with an average annual growth rate of 7%.
The president, thus, wondered, how he could cut ties with Mr Ofori-Atta as finance minister.
The president said he has a lot of difficulty understanding the clamour for Mr Ofori-Atta’s exit, since, he noted, even the IMF confirmed that the causes of the current economic situation in Ghana are global in nature rather than a result of internal mismanagement.
“It is very easy for people to say we went back to the IMF due to mismanagement of the economy. I do not accept that criticism because the reasons why we got into the situation we find ourselves has very little to do with us. In fact, the IMF confirmed this.”
The government and the International Monetary Fund, or IMF, are negotiating for an economic rescue scheme, but conversations are not going well, according to renowned economist and elder statesman Kwame Pianim.
In an interview with Accra-based TV3, he claimed that President Akufo-Addo and his troubled Finance Minister, Ken Ofori-Atta, were primarily to blame for the current state of affairs.
He claimed that the IMF was waiting for Akufo-Addo to provide a clear statement on the problem.
should accept responsibility for it and take decisive action to address the problems before they arise.
He noted that Ofori-continuing Atta’s tenure in office in the face of calls for his ouster was not resolving matters.
“The IMF negotiations are not going well. I know this for a fact. What the IMF is waiting for is a bold credible pronouncement from the president as he did over [the] COVID.
“The president said I take full responsibility, I am in charge and I am going to make sure that Ghanaians are protected from [the] COVID,” he submitted.
“We need the president to own the crisis. To come out and say, there is nothing that I will not do to stabilize the economy of Ghana, to stop this pressure and the economic crisis that is looming and that there are no sacred cows,” he stressed stating the need to review any and every government programme if need be.
Pushed about how he knew the negotiations were not going well, he insisted: “It is not going well, the negotiations. I know that. That is my business, to keep my ears open, I am a Ghanaian, and I am interested in the economy moving in the right direction.
“We have friends in Washington so what I am saying is that it is not going well,” he reiterated.
Government months back approached the IMF for a support programme amid an economic crisis. Whiles it has partly blamed the aftershock of COVID-19 and the Russia-Ukraine war, the opposition insists the crisis has been brought on by economic mismanagement brought on by reckless borrowing and unnecessary spending.
In addition to warning Ghanaians against any such news, he pointed out that the government had not submitted an application to the IMF.
Ahead of the 2020 general elections, certain people have devised a strategy to spread fake information, therefore Oppong Nkrumah further exhorted the media to thoroughly verify all material before publication.
Information Minister, Kojo Oppong Nkrumah Tuesday refuted media allegations that Ghana has been listed among the Highly Indebted Poor Countries (HIPC) status due to its declining economic situation.
He said the Akufo-Addo-led government did not apply to the International Monetary Fund (IMF) or the World Bank to be listed on the HIPC programme and urged the public to disregard such false reports circulating on social media.
Oppong Nkrumah responded to the allegations at the fifth edition of the Nation Building Updates in Accra.
The Minister said such viral fake news reports were part of a broad and deliberate strategy by some persons to deceive the public ahead of the December 7 polls.
Mr Oppong Nkrumah noted that currently, there was no ongoing HIPC programme under implementation by the IMF or World Bank.
He added that the Akufo-Addo-led government upon assumption of office in 2017 was implementing strategic programmes and policies that restored the bad economic situation inherited from the previous government and that all the macroeconomic and fiscal indicators were heading in the right direction.
The burgeoning economic status, the Minister said, enabled the Akufo-Addo-led government to roll out various social interventions such as the free supply of water and subsidized electricity to lifeline consumers during the COVID-19 pandemic restrictions.
Oppong Nkrumah explained that the Kufuor-led government after inheriting a bad economy in 2001 applied for the HIPC programme, which resulted in the cancellation of portions of the country’s debts and has since exited the programme.
The Minister urged the media to do thorough cross-checking of any information well before publication since some persons had hatched the plan of disseminating false news ahead of the elections.
Renowned economist and statesman Kwame Pianim has insisted that the Finance Minister, Ken Ofori-Atta, must, one way or the other, leave office now.
His call comes after President Nana Addo Dankwa Akufo-Addo urged Members of Parliament of his party, the NPP, to hold on with their demand for Ofori-Atta to be sacked over the economic difficulties in the country till the International Monetary Fund bailout negotiation he is leading is completed.
But according to Kwame Pianim, replacing Ofori-Atta is very critical to turning around the economy to get Ghanaians out of the current difficulties.
The senior statesman, who made these remarks in a TV3 interview monitored by GhanaWeb , outlined the following reasons as the justification for Ofori-Atta to leave office now.
Success of the IMF negotiation:
According to Kwame Pianim, the government’s current negotiation with the International Monetary Fund for a bailout is not going well because the Fund does not see any seriousness on the side of the government.
“What the IMF is waiting for is a bold, credible pronouncement from the president as he did over the COVID-19 (pandemic). And then you need a credible messenger. Ken Ofori-Atta is not a credible messenger.
“Somebody who didn’t want you taking this route, how can you say he should lead it?” he questioned
Save Ghanaians from additional misery
The economist intimated that Ofori-Atta’s mismanagement of Ghana’s economy is the cause of the hardship in the country and, therefore, he should step down.
“The hardship on Ghanaians is unprecedented. So, he Ofori-Atta should save Ghanaians additional misery by stepping down.”
Save the reputation of the NPP
Again, Kwame Pianim said that Ofori-Atta had to go to save the New Patriotic Party’s reputation as good managers of Ghana’s economy.
“NPP has a reasonably good reputation as a good manager of the Ghanaian Economy. And it is time that (the current economic meltdown) is stopped so that irreparable damage is not done to the reputation of the NPP as good managers of the economy,” he said.
Save the legacy of Akufo-Addo
Also, the statesman intimated that Ofori-Atta staying in office would make it very difficult to restore Ghana’s economy and also risks destroying the legacies of President Akufo-Addo.
“If he (Ofori-Atta) does not go and the president doesn’t let him go, we risk irreversibly dragging the president’s legacy and his presidency into the gutters,” he said.
Investigative journalist, Manasseh Azure Awuni, has suggested that it is untenable that Ken Ofori-Atta’s dismissal as Finance Minister will derail Ghana’s negotiations with the International Monetary Fund (IMF).
His comments come on the back of reports that President Akufo-Addo has asked the over eighty (80) NPP MPs demanding the sack of Ofori-Atta to allow him complete the IMF negotiations.
In a Facebook post, the award-winning journalist wondered if the negotiations with the Bretton Woods institution will grind to a halt if Ofori-Atta fell ill or passed away.
He wrote: “God forbid, but if Ken Ofori-Atta falls sick or dies, will the IMF negotiations cease? The excuse that his removal will derail the IMF negotiations is what we call in Gurune “nagenbeto”.
Background
On Tuesday, October 25, a group of NPP MPs held a press conference to demand that want Finance Minister Ken Ofori-Atta and Minister of State at the Finance Ministry, Charles Adu Boahen be sacked from their respective roles.
According to them, new faces in their stead will inject confidence in the economy which is on slope of decline.
Andy Kwame Appiah-Kubi, the Member of Parliament for the Asante-Akim North Constituency, who spoke on behalf of the over 80 MPs said they will boycott the 2023 budget reading and debate if President Akufo-Addo fails to dismiss his appointees.
Following this, the president has held meetings with the MPs where it is reported that he has appealed to them to allow Ken Ofori-Atta in particular complete the IMF negotiations.
Meanwhile, the majority caucus in Parliament have said in a statement that there is a consensus to dismiss Ofori-Atta however it should be deferred to after the IMF negotiations.
Dr. John Kwabena Kwakye, director of research at the Institute of Economic Affairs (IEA), has bemoaned the political leaders’ preference for party interests over national interests in the management of the nation.
On October 26, Dr. Kwakye stated in a series of tweets that the nation required a political figure who would suggestively buck the trend in order to foster progress.
Dr. Kwakye cited Singapore’s success story under Lee Kuan Yew to argue that candidates for public employment should be chosen on the basis of their qualifications rather than their connections to or allegiance with political parties.
On specific matters of the economy, the IEA Research Director advocated for the country to look within to find solutions to its challenges.
He further suggested that a move to the International Monetary Fund was not an answer to the current economic downturn facing the country.
“Washington is not the answer to our problems. We must find the solutions to our problems here ourselves. If our leaders cannot do that, then they have no business leading us. #Let’sFindSolutionsToOurProblemsOurselves,” the Economist wrote.
“We should discuss both a short-term plan to stem the current slide in the cedi and a long-term plan to stabilise it on a lasting basis.
“Remember one of Lee Kuan Yew’s secrets for Singapore’s success–MERITOCRACY! It means the leader gives public jobs to competent people and not necessarily to party people, friends or relatives.
“Political capture is killing Ghana. When our leaders get into power, they work to promote their political party interest rather than the national interest. We need a leader who can break this obsession,” Dr John Kwabena Kwakye tweeted.
Ghana’s economy has been experiencing a downturn in recent years. Inflation rates are at a record high level while the Cedi is also on a free fall against the US Dollar.
Amidst the challenges, the government is negotiating with IMF to secure a $3 billion programme to be spread over a three-year period after a series of downgrades of the economy by rating agencies such as Fitch, Standards and Poor and Moody’s.
The World Bank has approved a $270 million (£232 million) loan to Zambia to assist it in recovering from the effects of the coronavirus pandemic, the economic impact of the Ukrainian war, and managing its debt crisis.
In late 2020 Zambia became the first African country since the onset of the pandemic to default on its debt.
In August, the International Monetary Fund approved a $1.3bn loan to help Zambia – a major copper producer – restructure its debts.
The president of the World Bank has urged other creditors to help reduce Zambia’s debt.
A former finance minister, Seth Terkper, has stated that no government has secured GH¢1 billion from the International Monetary Fund (IMF).
According to him, the highest the country has received from the Fund is GH¢3 billion when the country was declared as HIPC.
Speaking at the 11th Ghana Economic Forum on October 25, 2022, he said “the highest we have had by way of intervention and that was HIPC was 3 billion. No government ever got 1 billion to do a correction. The highest was GH¢950 million which we did and that came after 2017 to the current administration.”
He also stated that the notion that Ghana was doing well before 2020 needs to be re-examined.
Meanwhile, the Director of the Institute of Economic Affairs, Dr. John Kwakye, has stated that Ghana’s revenue targets have not been ambitious enough to rake in the expected revenue needed for development.
According to him, every country thrives on good policies and the ability to take advantage of resources, but, in Ghana’s case, both have been defective.
“As a country, we need both resources and policies to advance our development. For Ghana, we have lacked adequate resources, and our policies have also been defective in so many areas,” he said.
The International Monetary Fund’s latest Regional Economic Outlook for Sub-Saharan Africa says the region is projected to grow by 3.6 per cent in 2022 – more than one percentage point slower than 2021 mainly due to a worldwide slowdown, tighter financial conditions, and volatile commodity prices.
It said rising food and energy prices are striking at the region’s most vulnerable, and public debt and inflation are at levels not seen in decades.
The most recent turmoil comes on top of a prolonged pandemic, leaving authorities with their most difficult and uncertain policy environment in years, the report noted, adding that international support to address ongoing challenges, including food insecurity and the green energy transition, remains essential.
The region’s economic activity is expected to slow significantly in 2022 and remain relatively modest in 2023.
A downturn in advanced economies and emerging markets, tighter financial conditions, and volatile commodity prices have undermined last year’s gains, the IMF noted.
It said looking ahead, the outlook remains highly uncertain.
Consequently, countries in the region are living on the edge.
“Late last year, sub-Saharan Africa appeared to be on a strong recovery path out of a long pandemic. Unfortunately, this progress has been abruptly interrupted by turmoil in global markets, placing further pressures on policymakers in the region,” stressed Abebe Aemro Selassie, Director of the IMF’s African Department.
The region is expected to grow by 3.6 per cent in 2022, down from 4.7 per cent in 2021, due to muted investment and the overall worsening of its balance of trade. Non-resource-intensive countries, which enjoy a more diverse economic structure, will continue to be among the region’s more dynamic and resilient economies, growing by 4.6 per cent in 2022, compared to 3.3 per cent in oil exporters and 3.1 per cent in other resource-intensive countries.
Following worldwide trends, inflation has increased faster and more persistently than previously anticipated, reflecting mounting prices for essential food and energy items, which comprise about 50 percent of the region’s consumption basket. And while the recent pickup in inflation is less striking relative to historical averages for sub-Saharan Africa, the cost-of-living squeeze has pushed millions of people into acute food insecurity and could weigh on economic growth and undermine social and political stability.
The most recent turmoil is just the latest in a series of shocks over the past few years, all of which have taken a toll on the region’s policy space. Public debt has reached about 60 per cent of GDP, leaving the region with debt levels last seen in the early 2000s. In this regard, the composition of debt has shifted towards higher-cost private sources, increasing debt service costs and rollover risks. In fact, 19 of the region’s 35 low-income countries are now in debt distress or at high risk of distress.
Against this backdrop, Mr Selassie pointed to four priorities for policymakers in the region:
“First, in the context of rising food insecurity, the utmost priority must be to protect the most vulnerable. Scarce resources should go to those who need them most. Poorly targeted emergency measures should be gradually phased out.
“Second, to contend with increased inflation and tightening global interest rates, policymakers should cautiously raise policy rates, while keeping a close eye on inflation expectations and foreign exchange reserves.
“Third, policymakers in the region need to continue consolidating their public finances to preserve fiscal sustainability, particularly in the context of rising interest rates. Credible medium-term fiscal frameworks, including effective debt management, can help lower borrowing costs. In countries with acute debt vulnerabilities, debt restructuring or reprofiling may be required, suggesting the need for improved implementation of the G20 Common Framework.
“And finally, they should set the stage for high-quality growth, amid accelerating climate change. Investment in resilient, green infrastructure, and capitalizing on the region’s sizable renewable-energy resources will require both innovative private finance and energy sector reforms.
“Budget support—including official development financing and humanitarian assistance—has been declining over the past two decades while the region’s immediate and longer-term development needs are rising, particularly in areas such as food security and climate change. Increased support, including more concessional finance, will be crucial for sub-Saharan Africa to be able to pursue a low-carbon and climate-resilient growth path.
“On our side, we have been supporting sub-Saharan Africa with close to $50 billion since the beginning of the pandemic; recent new Fund-supported programs (e.g., Benin, Cabo Verde, Mozambique, Tanzania, Zambia), have included policies to address the impact of the food crisis; and the IMF Board has just approved a new Food Shock Window to support our members suffering from acute food insecurity, a sharp food imports shock, or from a cereals export shock.
“We are also helping catalyze new capital inflows by boosting local capacity and expanding our lending facilities with our new Resilience and Sustainability Trust to provide affordable financing to address longer-term structural challenges.
“With help, sub-Saharan Africa will be poised to fulfil the promise of the African century, contributing to a more prosperous, greener future for the region and the world,” he said.
President Akufo-Addo will meet the New Patriotic Party (NPP) Members of Parliament who want the Finance Minister, Ken Ofori-Atta be relieved of his duties.
The meeting will take place this evening, Tuesday, October 25, 2022 at 6:30 pm.
The NPP MPs argued that their attempts to get the administration take steps to assist their constituents in light of the failing economy had been ineffective.
Thus, on Tuesday, October 2022, the NPP organized a news conference to express their unhappiness and demand the resignation of Charles Adu Boahen the Minister of State for Finance, and Ken Ofori-Atta.
Andy Kwame Appiah-Kubi, the Member of Parliament for the Asante-Akim North Constituency and spokesperson for the disgruntled Majority group, told the media on Tuesday that sacking Ofori-Atta and Adu Boahen will help restore confidence in Ghana’s economy.
“The recent development within the economy is of major concern to our caucus and our constituents. We have made our grave concern known to our president through the parliamentary leadership and the leadership of the party without any positive response.”
“We are by this medium communicating our strong desire that the president changes the Minister of Finance and the Minister of State at the Finance Ministry without further delay in order to restore hope to the financial sector and reverse the downward trend in the growth of the economy,” he added.
Several Ghanaians had mounted pressure on President Akufo-Addo to remove Mr. Ofori-Atta from office in light of the country’s current economic predicament, which has compelled government to seek support from the International Monetary Fund (IMF).
Some eighty Members of Parliament (MP) belonging to the governing New Patriotic Party (NPP) have called for the sacking of Finance Minister, Ken Ofori-Atta.
They also want the Minister of State at the Finance Ministry, Charles Adu Boahen, removed from post.
According to the legislators, the aforementioned members of the Executive have proven to be incapable of handling the Ghanaian economy which is currently in tatters.
Speaking to the press on Tuesday, October 15, 2022, Asante-Akim North MP, Andy Kwame Appiah-Kubi said “we are communicating our strong desire that the President should change the Minister of Finance and the Minister without further delay in order to restore hope into the financial sector and reverse the downward trend in the growth of the economy.”
He noted that push has come to shove as the concerns of the Majority Group which were tabled before its leadership to the President, have yielded no positive results.
The Majority Group now adds their voice to the many Ghanaians calling for Mr Ofori-Attato be replaced by a more competent individual.
Pressure now mounts on President Akufo-Addo, who has indicated that he has no plans of sacking the current Finance Minister.
The President has explained that Mr Ofori-Atta has proven himself worthy of managing the economy. He cited Ghana’s growth in 2017 to argue that he finds no basis to replace the Finance Minister.
“I came to office in 2017 under a stringent IMF programme. This same man was able to manage the affairs of our economy in such a way that in my first term, we were one of the fastest-growing economies in the world. An average growth rate of 7% which allowed us to initiate programmes such as Planting for Food and Jobs,” he said.
“So somebody who has been able to do that. The current difficulties are not his fault. So how do I do it (sack him)? What will be the basis? What will be the rationale,” he further interrogated.
Ghana is currently battling a high inflation rate of 37.2% as of September, 2022. Also, the local currency continues to lose its value against major trading currencies.
A dollar is trading at about GH15. All these have happened under the watch of Finance Minister, Ken Ofori-Atta.
Meanwhile, Mr Ofori-Atta has encouraged Ghanaians to remain calm as the country engages the International Monetary Fund for an economic recovery programme.
He expects that the local currency will begin to appreciate once a deal is agreed upon.
President Akufo-Addo says he is hopeful the outcome of the International Monetary Fund ( IMF) negotiations would tackle the high cost of living in the country.
He admitted the cost of living was high but was optimistic that the package of measures which would accompany the IMF programme would address the economic issues successfully and reduce the hardship on Ghanaians.
“Yes we are going through difficulties but at the same time we trying to do well in other areas, the fundamentals of government policy is working. We have about 120 One District, One Factory completed and 300 of them in the pipeline,” he said.
President, Akufo- Addo made these statements at Nkawkaw in the Eastern Region on Friday when he spoke to the media as part of his three-day tour of the Eastern Region.
Speaking on concerns made by some persons to review the free Senior High School (SHS) policy, the President said he was a bit skeptical about it.
He argued “I have to confess my attitude when I hear the word review I hesitate because, first people who spoke about the review are people who opposed the policy in the first place and so if someone who did not want the policy comes to tell us that we should review it then my understanding is that he is to review the policy to reverse it.”
According to the President, the two fundamental thrust of the policy which was to expand access that has been dramatically achieved.
“The other was to include quality outcomes of education and I must say The outcomes of the free SHS graduates are a major improvement on the free SHS data that we have whether it is mathematics or integrated science, english across the board.”
President Akufo-Addo added that each of these areas of study has seen a significant increase in the results of the students.
President Akufo-Addo said reviewing these two thrusst of the policy and the improvement made will somehow be compromised, adding the country cannot tamper with the two fundamentals.
He said “as a country, we have ensured that nobody in the country, no matter their social origin and financial background should be denied access to good quality secondary education and added that for the past five years, the implementation of the policy has been established.”
He indicated that so far, his government have been able to financially sustain the free SHS policy and would continue to sustain it.
The President later attended an official opening of the NPP National Executives and directors Training and Orientation Conference at Rock City in the Abetifi Constituency.
He then proceeded to Nkawkaw to inspect the construction of the Nkawkaw-Abirem- Ofoase -Akim Oda road Project.
President Akufo Addo later paid a courtesy call on the Chief of Ofoase, inspected the construction of the Ofoase-Ayirebi Agenda 111 hospital project and departed to Akyem Asuboa in the Asene Manso Akroso constituency to inspect a similar project.
Calls for the dismissal of the Minister for Finance and Economic Planning, Ken Ofori-Atta, have heightened in the last couple of weeks following the wobblign state of the economy.
In spite of the fact that netizens have taken to social media to whine and call for the dismissal of the Finance Minister, President Akufo-Addo has disregarded their solicitations.
In some way or another, this got a few well-known individuals to pound on the Minister’s renunciation since the economic slump has forced government to seek a financial rescue programme from the International Monetary Fund (IMF).
President Akufo-Addo on August 8, while talking in an exclusive interview on Tamale-based North Star radio, during an official tour to the region shielded his ministers.
He noted that they have been working hard while expressing their outputs have been extensive.
GhanaWeb in this article puts together a list of some public figures pushing for the resignation of the Finance Minister.
Nana Oye Bampoh Addo
Former Gender Minister, Nana Oye Bampoh Addo, joined calls for Finance Minister, Ken Ofori-Atta, to resign.
She believes as the main gatekeeper of the national economy, the Minister must take responsibility for the economic downturn the country is experiencing.
Nana Oye pointed out that the approach that the National Democratic Congress government in 2015 used to secure a programme from the International Monetary Fund was different from that of this government.
Kwabena Agyei Agyapong
Former General Secretary of the governing New Patriotic Party, Kwabena Agyei Agyapong, has also hammered on the resignation of Ken Ofori-Atta.
According to Mr Agyapong, the main reason for his call was the decision of the government to seek an economic rescue programme with the International Monetary Fund (IMF) – a position that the Minister had vehemently opposed publicly and vowed will not be taken.
Mr Agyapong added that the Minister must on his own volition tender his resignation because of his anti-IMF statements and having “got it wrong.”
Lydia Forson
Entertainment personality, Lydia Forson, following the resignation of the UK’s Prime Minster, Liz Truss, questioned the rationale behind Ken Ofori-Atta’s decision to stay in office as the Minister of Finance.
According to her, Ghanaians have lost confidence in Ken Ofori-Atta as the Minister of Finance due to the economic downturn currently being faced by Ghanaians.
In a tweet sighted by GhanaWeb, she said, “It makes absolutely no sense that Ken Ofori-Atta is still the finance minister, how? He’s lost the confidence of the people!”
Nana Aba Anamoah
Lydia’s views were not different from media personality, Nana Aba Anamoah, who has also pushed for the Minister of Finance, Ken Ofori-Atta, to save himself the disgrace and step down.
According to her, Ken Ofori-Atta has failed in the management of the local economy.
Nana Aba Anamoah attributed the frequent fall of the local currency, high inflation rate, and increase in petroleum prices, among other factors leading to the country’s economic crisis to the incompetence of the Finance Minister.
She asserted that the current harsh economic condition was due to government’s “imprudent borrowing taste and wasteful use of those flammable funds.”
Kweku Sintim Misa (KSM)
Known for not shelving his thoughts on governmental issues, Ghanaian playwright and actor, Kweku Sintim Misa (KSM), in a recent post advised Minister for Finance and Economic Planning, Ken Ofori Atta, to resign from his position.
He didn’t mince words when he shared a post on Twitter on October 22, 2022, stating that since President Akufo-Addo has resolved not to sack him, Ken Ofori-Atta, he should take the initiative and step down from the position.
Dr Theo Acheampong
Political risk analyst and economist, Dr Theo Acheampong reiterated calls for the Finance Minister to resign from his post.
Speaking on Newsfile on JoyNews, he said that the calls for the minister’s resignation are not because he is not liked but because he has made serious policy mistakes which have impacted the livelihoods of many.
Dr Acheampong, listing some of the minister’s faults, said that “one is the E-Levy, number two on the fact that philosophically he doesn’t support us going to the IMF.”
