Ghana’s newly-formed government may request further funding from the International Monetary Fund (IMF) as part of its ongoing three-year program, according to Finance Minister-designate Cassiel Ato Forson. The move aims to strengthen the economy amidst lingering financial challenges.
President John Dramani Mahama, who assumed office earlier this week after winning December’s election, appointed Ato Forson, a former minority leader in Parliament, to the critical role of Finance Minister.
“We are committed to working with the IMF, but we also aim to secure additional financing by collaborating with the IMF and other domestic and international partners,” Forson told reporters ahead of a meeting with an IMF delegation currently in Accra.
Forson criticized the government’s reliance on Treasury bills, describing it as unsustainable. A former deputy finance minister, Forson emphasized the importance of finding alternative funding sources to stabilize the economy.
Economic Challenges and Proposed Reforms
Ghana, a leading producer of gold and cocoa, defaulted on most of its external debt in 2022, triggering a difficult restructuring process. Forson noted that the new administration intends to finalize negotiations with non-Eurobond commercial creditors to conclude the restructuring process.
Forson, 46, a chartered accountant with advanced degrees in taxation and finance, highlighted plans to cut public spending to curb inflation and reduce financial waste. “There is a lot of wastage in the system, and we will eliminate it,” he said. He also revealed plans to restart domestic bond issuance by mid-year as part of efforts to boost the economy.
Revisiting IMF Agreement
During his campaign, President Mahama pledged to renegotiate the terms of Ghana’s IMF bailout deal. However, analysts believe his administration has limited flexibility and is unlikely to abandon the current program. The promise mirrors those of reformist leaders in emerging markets, such as Sri Lanka’s Anura Kumara Dissanayake, who also vowed to revise IMF agreements.
Mahama’s administration has promised to tackle public dissatisfaction by focusing on economic recovery and job creation. The president has swiftly nominated key officials, including John Abdulai Jinapor as Energy Minister and Dominic Akuritinga Ayine as Attorney General and Justice Minister.
Revamping the Cocoa Sector
Ato Forson also pledged to overhaul Ghana’s cocoa sector, which has faced significant challenges in recent years. “We need to address issues related to funding, diseased crops, and production. The entire sector requires a comprehensive review,” he stated.
The new government, which holds a two-thirds majority in Parliament, is poised to address Ghana’s worst economic crisis in decades, with ministerial nominees awaiting parliamentary approval.