ACCRA, May 29 (THE AFRICAN PORTAL) – Ghana will no longer seek financial bailout from the International Monetary Fund (IMF), the Minister of Finance, Dr Cassiel Ato Forson, has declared.
He recounted the severe economic crisis the country suffered in 2022, leading to seeking assistance from the IMF, with the attendant painful sacrifices, all arising from reckless spending, excessive borrowing and poor financial management.
“It is important to recount this not to dwell on the past, but to remind ourselves of the heavy price of fiscal indiscipline and economic recklessness, and to affirm our collective resolve that Ghana must never return to that path,” the Finance Minister said.
Making a statement to parliament yesterday on the country’s new engagement with the IMF, Dr Forson said some painful experiences could not be taught; they must be lived to be understood, but once experienced, never again should they be repeated.
Dr Forson said the country had successfully completed the final review of its current IMF programme and would transition to a new, non-financing arrangement known as a Policy Coordination Instrument (PCI).
He described the development as a major milestone in President John Mahama’s Reset Agenda, noting that Ghana had moved from crisis management to economic stability.
“Ghana has evolved from a position of supplicant to one of partner,” he said, stressing that the new engagement with the IMF would focus on policy coordination, reforms and investor confidence rather than direct financial assistance.
“No further IMF financial bailout will be required in the foreseeable future,” he stated.
Economic turnaround
Dr Forson told Parliament that the government had undertaken decisive reforms to restore macroeconomic stability after inheriting what he described as a deep economic and financial crisis.
He said in 2022, Ghana experienced severe fiscal and debt challenges characterised by rapid cedi depreciation, soaring inflation, weakened investor confidence and loss of access to the international capital market, resulting in repeated sovereign credit rating downgrades by major international rating agencies.
The crisis, he stated, culminated in Ghana’s request for debt treatment under the G20 Common Framework, while the Domestic Debt Exchange Programme (DDEP), introduced in December 2022, widely imposed significant losses on domestic bondholders, including pensioners, banks and financial institutions.
“Ordinary Ghanaians bore the heaviest burden of the crisis through runaway inflation, erosion of incomes and savings, high interest rates, job losses and increased economic insecurity,” he stated.
Reforms
Dr Forson explained that upon assuming office, the government recalibrated the IMF-supported programme to ensure fairer burden-sharing and deeper structural reforms.
Among the key interventions he mentioned were the introduction of a Public Financial Management commitment control system to contain expenditure, the operationalisation of the Sinking Fund to manage future debt obligations, and the establishment of the GoldBod initiative to support foreign exchange stability and reserve accumulation.
Credit: Graphic Online
