IMF bailout will not end present economic challenges – Ofori-Atta

Finance Minister Ken Ofori-Atta has watered down any expectations of a sudden recovery of the economy following the IMF program.

He argued that the program only “paved the way for an ambitious and well-thought-out program to reform the economy.”

In a presser to update Ghanaians on the economy on Sunday, Mr. Ofori-Atta said Ghanaians should rather brace up for key reforms needed to put the economy back on track, including expenditure cuts and boosts in revenue.

“Let me state clearly that securing the IMF program is not an end to our current challenges. Though it has significantly paved the way for the implementation of an ambitious and well-thought-out program of reform for our economy and country, in fact, the real work of adjustments, re-alignments, and the return to a path of steady economic growth has just begun. Let us brace ourselves for the needed reforms, especially in expenditure control, non-arrears accumulation, revenue growth, ECG collections, and energy sector reforms, in order to rebuild the walls of the Republic with urgency”, Mr. Ofori-Atta asserted.

“Our reform program, the Post-COVID-19 Programme for Economic Growth (PC-PEG), now supported by the 3-year Extended Credit Facility arrangement with the IMF, is built on clear targets and strong policy and structural measures”, he added.

He noted that the government’s own Public Financial Management Strategy, which calls for a shift from central government to general government operations, is consistent with this goal for structural restructuring.

According to the Finance Minister, the change is crucial because it makes it possible to monitor important state institutions, including MMDAs, SOEs, particularly Cocobod and ECG, and other players in the energy sector, whose actions have a large and direct financial influence on the economy.

The IMF approved Ghana’s US$3 billion Extended Credit Facility (ECF) package on May 17, 2023, and remitted the first tranche of US$604 million in the same week.

Although the package will help the country fund its short-term deficits, analysts have already predicted the negative impact the program will have on individuals and private businesses, alluding to tax hikes.