By: Napoleon Ato Kittoe
Ghana is intrinsically a part of the committee of nations and an identifiable member of the October audience of the Bretton Woods institutions in Washington DC.
Within the gamut of events and the crowd, Ghana knows too well that she participated in the joint meetings as one caught between and betwixt the deep pockets that must rescue her economy from going down the abyss.
The Ghanaian currency is said to be the second weakest in the world, with debt to GDP at more than fifty percent and inflation at thirty-eight percent, considered first of this kind since 1992.
The factors reckoned to be economic stabilizers are out of gear, on the backs of huge revenue shortfalls, high debt portfolio, and badly depleted external reserves. If measures taken by government such as the introduction of Electronic levy are knee-jerk reactions as critics may call it, then the current economic/financial statistics have got a practical bite that have caused frenzied desire for an outlet.
The government attributes the downswings to external shocks such as the long lapse in production sectors due to the recent COVID-19 global pandemic and the distortions in global supply lines in the wake of Russia’s war in Ukraine. To some extent, the malaise is blamed on inadequate domestic revenue mobilisation.
This exigency has compelled government to increase the tempo of tax collection. The opposition in Ghana accuses the Akufo Addo administration of irresponsible borrowing, “reckless” spending of unprecedented cash inflows and corruption. The government rejects the finger-pointing, as only a political syndrome and that the opposite of what the opposition “foists” on it, fiscal discipline, investments in agriculture and digitalism, are the terms of its conduct.
The Government of Ghana is seeking IMF bailout which the latter pledges to fulfil. The World Bank has also indicated through its Country-Director that its financial interventions in Ghana is a continual process. The shock-absorbing support offered by these two financial organs, are considered life-saving by middle-grounders in Ghana’s politics as necessary evil.
The IMF rollout begins in 2023, and the participation in their meetings by Finance Minister of Ghana, Ken Ofori-Atta and holders of similar portfolios across the globe, could be seen as not only preparatory but a watershed. A reflective period that binds subscribers to the terms of the giver and with the opportunity to manoeuvre at your own accord as little as milk in breasts of the male tiger.
In walking the fine line on the delicate distance, Ken Ofori-Atta knows too well how bumpy the political road could be, in terms of how IMF conditions impact the population.
To this end, he is pushing for the short-term measures that promises stability for the Ghanaian economy and leveraging the COVID euphoria to secure for the vulnerable ones, a greater financial assistance and measured reliefs. The IMF and World Bank session is also being attended by Financial Ministers of the Group of Seven Most Industrialized nations.
Whilst attending the crucial engagements in Washington DC, Britain’s Chancellor of the Exchequer, Kwasi Kwarteng became a casualty as he was reshuffled out of Prime Minister Liz Trauss cabinet for what watchers called his botched initiative on tax cuts.
Perhaps to be seen to be tackling the vexed issue which reverberated in the global financial system including corridors of IMF, the British Prime Minister did not wait for his minister to depart the meeting before her announcement to remove him.
That may be a warning shot at others who are clutching the turbulence, to sit up. President Akufo Addo and allies reposes confidence in Ken Ofori-Atta as a professional who knows his mettle and working in partnership with others, capable of reversing the tide on Ghana. Some of his political cronies faults the previous Mahama for poor economic management. They say, the NPP administration in its early years in office, prior to the pandemic, doubled growth rate from the low depths the country had sunk before its assumption of power.
The political strokes in London may connect Accra for even more intensified calls for the head of Ghana’s Finance Minister by the opposition who wants to see his back. The latter sees his exit as first step in the raft of measures proposed to take Ghana out of the woods.
