IMF bailout: Gov’t going to IMF for a loan, not aid – Oppong Nkrumah
Information Minister, Kojo Oppong Nkrumah has insisted that the government’s engagement with the International Monetary Fund (IMF) is to secure a ‘loan’ and not to receive ‘aid’.
Amid mockery that the move makes nonsense of the Ghana Beyond Aid mantra of the ruling New Patriotic Party (NPP) government, Mr. Oppong Nkrumah said that the government’s decision is being misinterpreted.
“Ghana beyond aid is still relevant. What we are going to the fund for is not aid, it’s a loan. So it doesn’t change the principle of Ghana beyond aid. The loan is not an aid. The loan can never be an aid. We are going for a loan which we will pay back,” he said.
The Information Minister further explained, “We will mobilize our domestic resources, put it into the productive sectors, grow the economy, when the GDP comes we have to pay a certain percentage of it to the treasury so that we can service those debt obligations.
“The vision of Ghana beyond aid is that we should get to the point where we are able to mobilize our own resources to do the things we are looking for and not rely on aid from other countries,” he said in an interview with GTV monitored by theghanareport.com.
Following the arrival of an IMF team in Ghana on Tuesday, in-person discussions with a government of Ghana team will officially begin today, 6 July 2022.
Background
The government is scheduled to engage the International Monetary Fund (IMF) to provide support for a program to reverse the economic challenges faced by the country, Minister of Information Kojo Oppong Nkrumah, has revealed.
The country is faced with high debt, low revenue, rising inflation, steep depreciation of the cedi against other major currencies, and a general rise in the cost of living attributed to external factors such as the Russia-Ukraine war and the COVID-19 pandemic.
The government had indicated that it wasn’t considering a program from the Bretton Wood institution after 16 bailouts from past governments.
However, after a Cabinet meeting on Thursday, 30 June 2022, President Akufo-Addo has given the green light for interactions to commence.
“The President of the Republic, Nana Addo Dankwa Akufo-Addo, has authorized Finance Minister Ken Ofori-Atta to commence formal engagements with the International Monetary Fund (IMF), inviting the Fund to support an economic program put together by the Government of Ghana.”
“This follows a telephone conversation between the President and the IMF Managing Director, Miss Kristalina Georgievs, conveying Ghana’s decision to engage with the Fund,” a statement issued by Mr. Oppong Nkrumah said on Friday, 1 July 2022.
The engagement with the IMF will seek to provide a balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of glaring challenges.