Ghana’s newly established government may pursue additional financial support from the International Monetary Fund (IMF) as part of its ongoing three-year arrangement with the institution, according to finance minister designate Cassiel Ato Forson, who made this statement on Thursday.
President John Dramani Mahama, who assumed office this week after defeating the ruling party’s candidate in the December elections, appointed Forson, the former minority leader in parliament, to the crucial role of finance minister.
“We are dedicated to collaborating with the IMF, but we also aim to secure additional financing through partnerships with the IMF and other domestic and international stakeholders,” Forson informed reporters prior to a meeting with an IMF delegation currently in Accra.
Forson, who previously served as deputy finance minister, remarked, “The dependence on Treasury bills and similar instruments has not proven to be very effective.”
The IMF has not yet responded to a request for comment.
Forson, a 46-year-old chartered accountant with a Master’s degree in taxation from Oxford and a doctorate in finance from a local institution, indicated that the new administration would implement measures to reduce public expenditure in order to further decrease inflation.
“There is significant waste within the system, and we will address this,” he stated, noting that such actions would also facilitate the government’s plan to resume domestic bond issuance by mid-year.
The West African nation, known for its gold and cocoa production, defaulted on a majority of its external debt in 2022, resulting in a challenging restructuring process that is nearing completion.
Forson mentioned that Mahama’s administration would finalize this process by reaching an agreement with its non-Eurobond commercial creditors.
REVISITING IMF DEAL
The new president, who previously held office from 2012 to 2017, had committed to renegotiating the terms of Ghana’s bailout agreement with the IMF during his campaign.
However, market observers believe that he has limited flexibility and is unlikely to abandon the current IMF program despite his campaign promises.
His commitment reflected those of other reformist candidates who were elected in emerging markets last year, such as Anura Kumara Dissanayake from Sri Lanka, who campaigned on a platform of reevaluating the terms of an IMF program and restructuring debt.
Mahama has vowed to promptly form a government capable of effectively addressing the rising dissatisfaction by enhancing the economy and generating employment opportunities.
Additionally, he has appointed John Abdulai Jinapor as the energy minister and Dominic Akuritinga Ayine as the attorney general and justice minister, as announced by the presidency on Thursday.
The newly established government is taking over an economy that is recovering from its most severe crisis in a generation. The nominees for ministerial positions must receive approval from Parliament, where Mahama’s National Democratic Congress (NDC) party possesses a two-thirds majority.
Forson has committed to revamping the management of the vital cocoa sector, which has encountered difficulties in recent years.
“We must thoroughly examine the issues related to funding, diseased crops, and production. The entire sector requires a comprehensive overhaul,” he stated.
Forson faced charges related to the misappropriation of public funds through an ambulance supply contract during his tenure as deputy finance minister, but he was later acquitted by the courts.
