Ghana’s new government may seek more assistance from the International Monetary Fund during its existing three-year agreement with the lender to cushion the economy, finance minister nominee Cassiel Ato Forson said on Thursday.
President John Dramani Mahama, who was sworn in this week after defeating the ruling party nominee in the December election, has appointed the former minority leader in parliament as finance minister.
“We are committed to working with the IMF, but we also want to ensure that we can raise financing; additional finance, working with the IMF and other domestic, international partners,” Forson told reporters before of a meeting with an IMF delegation visiting Accra.
“The reliance on Treasury bills and others has not been very helpful,” said Forson, who has previously served as deputy finance minister.
The IMF did not immediately respond to a request for comment.
Forson, a 46-year-old chartered accountant with a Masters degree in taxation from Oxford and a doctorate in finance from a local institution, said the incoming administration would also reduce public spending to further reduce inflation.
“There is a lot of waste in the system, and we will reduce it,” he said, adding that the measure will also assist the government in resuming domestic bond issuance by midyear.
The West African gold and cocoa producer defaulted on the majority of its external debt in 2022, resulting in a harsh restructuring that is nearly complete.
According to Forson, Mahama’s government would end the process by reaching an agreement with its non-Eurobond commercial debtors.
REVISITING THE IMF DEAL
During the campaign, the incoming president, who previously served from 2012 to 2017, promised to renegotiate the conditions of Ghana’s IMF bailout arrangement.
Despite that campaign rhetoric, market investors believe he has limited space for movement and is unlikely to reject the existing IMF strategy.
His statement resembled that of several reformist candidates elected in developing markets last year, including Sri Lanka’s Anura Kumara Dissanayake, who campaigned on a promise to review the terms of an IMF programme and debt restructuring.
Mahama has committed to form a government that can quickly address rising discontent by strengthening the economy and creating jobs.
He also appointed John Abdulai Jinapor as energy minister and Dominic Akuritinga Ayine as attorney general and justice minister, the presidency announced on Thursday.
The new government inherited an economy that is emerging from its worst crisis in a generation.
Ministerial nominees must be confirmed by Parliament, where Mahama’s National Democratic Congress (NDC) party commands a two-thirds majority.
Forson promised to revamp the management of the vital cocoa business, which has had issues in recent years.
“We must examine the concerns of funding, damaged crops, and productivity very carefully. “The entire sector requires an overhaul,” he stated.
When he was deputy finance minister, Forson was charged with embezzling public funds through an ambulance supply arrangement, but was cleared by the courts.
Credit:citinewsroom.com
