Following the successful completion of Ghana’s $3 billion contract with the International Monetary Fund, President Nana Addo Dankwa Akufo-Addo has disclosed plans to borrow again on the global market to finance infrastructure projects.
Mr. Akufo-Addo stated during a speech at the Qatar-Africa Economic Forum in Doha that even though his administration is not in a hurry to re-enter the global market, it makes sense to benefit from it now and save some money.
“We have positioned ourselves to be able to go back into the International market, which had been a source of funding for us during the first three or four years of our government.
“There is no rush but obviously why not take advantage of global savings, it makes a lot of sense to me. We will try as much as possible to maintain the discipline which is required and the most important requisite for a successful programme.”
Nana Addo Dankwa Akufo-Addo
Speaking at the 3rd Qata Economic Forum, he was asked why it took the Fund so long to approve the agreement. He responded, “We went in July last year and it has taken us July to May to secure the programme.
“Usually, the negotiations with the IMF take time. In fact, the 10 months which have been involved in the Ghanaian programme is one of the fastest on record. There is a whole lot of stuff that you had to go through in terms of change of data, negotiations, and making sure that the macro indices you are looking for are in the right direction. All of these may take time, Nevertheless, it is over.”
Nana Addo Dankwa Akufo-Addo
The President does, however, think that the bailout would give the country the groundwork for refocusing and repositioning its economy in order to regain the lost macro stability.
“Secondly, to be able to have better control over important details like the interest rate, inflation and then finally, also to position us to be able to be back to the international capital market which has been a source of funding for us for the first three or four years of our government.”
Nana Addo Dankwa Akufo-Addo
He said that the Finance Minister’s remarks clarified that the nation would make every effort to uphold the discipline needed to have a successful program with the IMF.
“That will mean ramping up our own domestic savings, being able to put systematic control of our public expenditure to make sure that we are always cutting our coat, according to our cloth and giving the impetus to private sector investment. We are looking at that more than we are looking for assistance from the multilateral.”
Nana Addo Dankwa Akufo-Addo
Ghana’s commitment to fiscal restraint was reiterated previously by the Finance Minister, Ken Ofori-Atta, who also declared that Ghana will not hurriedly seek to borrow money from the foreign capital market.
Ofori-Atta emphasized the need of income strategies and smart expenditure management in achieving financial stability and sustainability, during a press conference on Thursday, May 18.
Ghana To Begin Rigorous Expenditure Cuts
In order to comply with the conditions imposed on the $3 billion bailout by the International Monetary Fund (IMF), President Nana Akufo-Addo said that his administration would start making drastic expenditure cuts.
According to him, the government is keen to reverse the nation’s fortunes and would take all necessary steps to ensure that the faltering economy is revitalized.
“Rationalisation of our expenditure, rationalisation of government expenditure is something that we have given the assurance. Domestic revenue mobilisation is absolutely critical for us, and already we are seeing signs.
“We have a fiscal responsibility law in Ghana that has pegged our fiscal deficit at 5 percent but already we are way above that and the sooner we can bring that to more acceptable levels the better for us.”
Nana Addo Dankwa Akufo-Addo
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