Ghana’s government rejects call to deal with the IMF

By Kent Mensah

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Posted on February 16, 2022 11:08

Ghana’s President Nana Akufo-Addo
Ghana’s President Nana Akufo-Addo in Brest, France February 11, 2022. Ludovic Marin/Pool via REUTERS

A former finance minister and a clutch of bankers are calling for a deal with the IMF as the best route to shore up Ghana’s shaky finances. However, the Treasury team under finance minister Ken Ofori Atta have set their face against it. For them, it is a matter of national pride, even though their alternative strategy could come at a high political price.

Ofori-Atta is banking on boosting revenues via the politically unpopular Electronic Transactions Levy, which is yet to be passed in parliament. Higher tax receipts and the promised swingeing cuts to public spending will allow the government service its ballooning debts, but the fallout from such a move could cause more political headaches for President Nana Akufo-Addo’s government.

Ofori-Atta and his team are also taking on international ratings agencies that have questioned Ghana’s economic trajectory. Moody’s has downgraded Ghana’s senior unsecured debt ratings to Caa1 from B3. It has forecast that the country’s debt ratios will continue to deteriorate in the short-term and constrain policy options.

“Moody’s estimates that government debt ended 2021 at 80% of GDP while interest payments alone consumed half of government revenue that year (positioning Ghana with the second largest

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