Ghanaian President Nana Akufo-Addo on Thursday defended his decision to seek assistance from the International Monetary Fund (IMF), saying it was necessary to « straighten out public finances » after the double shock of the pandemic and the Russian invasion of Ukraine.
The decision caused an outcry in Ghana, which is in the throes of a severe economic crisis, where critics of President Akufo-Addo accuse him of reneging on his initial decision not to call on the IMF. In 2018 the Ghanaian President strongly rejected the IMF option. « We are determined to put in place irreversible measures, to maintain macroeconomic stability. Thus, there will be no reason to rely on this international institution [IMF, Editor’s note], » he said in a speech in February of that year.
This Friday, July 8, 2022, IMF representatives are in Ghana to help « restore macroeconomic stability, preserve debt sustainability and promote inclusive and sustainable growth, » according to an official statement.
« All countries in the world are working to return to a state of normalcy after the devastating impact of the Covid-19 pandemic, the consequences of which were exacerbated by the Russian invasion of Ukraine, » the president said.
« In our case, we have decided to seek the collaboration of the IMF to repair, in the short term, our public finances, » he added.
The West African country recorded 27 percent inflation in May, its highest level in two decades.
Mr. Akufo-Addo also said the government would continue to work in the medium and long term to strengthen the economy.
This is the 18th time Ghana has sought IMF assistance in its history. In 2015, the country was granted a loan of about $1 billion in return for a fiscal austerity plan.
The law, called « E-Levy », provides for a 1.5% tax on electronic transactions, including mobile money payments, which are widely used in the country.
For many Ghanaians, faced with a skyrocketing cost of living, this tax represents an additional burden.
This year, the president and his ministers have also cut their own salaries by 30 per cent and introduced other measures that they hope will save the government about 400 million euros.