Without IMF, Will Ghana Ever Be Able To Sustain Its Economic Growth and Stability? Razak Kojo Opoku Writes

His Excellency President Akufo-Addo says things are getting better and that the economy of Ghana grew by 4.2% in the 1st quarter of 2023. This is a very refreshing news. However, it is imperative to state that, there is more work to be done in order to fully win back the trust, love and confidence of the Ghanaian people ahead of 7th December 2024 general election.

The historical data of Ghana since 1957 is quite worrying when carefully analyzed in terms of the management of the Ghanaian economy. It looks like our political leaders are successfully creating and cementing the impression that “without the dictates of the small small boys at the IMF”, they are unable to prudently manage and safeguard the economy of Ghana. (Note that : the “small small boys at the IMF* is a statement made by Deputy Minister of Trade /MP for New Juaben South Constituency).

The inability of the current and previous Governments in Ghana to manage the economy without external bailouts from the International Monetary Fund (IMF) is indeed of a greater concern to majority of discerning Ghanaians.

Ghana has been to the IMF 17 times for bailouts since becoming a member of the IMF in September 1957. After the end of each IMF Programme, the economy of Ghana will get worse again until we seek another bailout from the IMF and this has been the trend since 1957.

Ghana between 1966 and 1979 went to the IMF 5 times for bailouts namely:
1.17th May 1996
2. 25th May 1967
3. 28th May 1968
4. 29th May 1969
5. 10th January 1979.

After the end of the IMF programme in 1979, the economic conditions of Ghana became worsening until on 3rd August 1983, Rawlings under PNDC administration went to the IMF for bailouts. The PNDC/NDC under Rawlings Government was under the IMF programmes for 8 Consecutive times namely:
1. 3rd August 1983
2. 27th August 1984
3. 15th October 1986
4. 6th November 1987(Structural Adjustment Facility Commitment)
5. 6th November 1987(Extended Fund Facility)
6. 9th November 1988
7. 30th June 1995
8. 3rd May 1999

After the end of the IMF programmes in 1999, the economy of Ghana became deteriorated with poor economic conditions, worse inflation rate and unsustainable debts to GDP.

When President Kufuor under NPP Government came in office in 2001 they went back to the IMF programme for economic bailout under the HIPC initiative on 9th May 2003. Through the HIPC initiative, Ghana’s debts reduced significantly from $66 billion in 2003 to $23 billion by 2006.

After the end of HIPC initiative coupled with 2007/2008 global financial crisis, the economy of Ghana suffered some setbacks until 15th July 2009 when President Atta-Mills under NDC Government took Ghana back to the IMF for Extended Credit Facility.

After the death of Mills and subsequently end of the IMF programme, the economy of Ghana again deteriorated coupled with Dumsor and fast depreciation of the Cedi, from $1 to 2 Cedis to $1 to 4. 40 Cedis. This forced President John Mahama under NDC to went back to the IMF on 3rd April 2015 for economic bailout.

President Akufo-Addo under NPP Government inherited 2years of Mahama’s 3-year IMF programme from 2017 to 2018.

Within 2017 and 2018 under the inherited Mahama’s IMF programme, the economy of Ghana was stable with phenomenon growth and considerable good indicators. Immediately after the end of the IMF programme in 2018 and Akufo-Addo’s Government deciding not to seek another IMF bailout coupled with COVID-19 pandemic and initial shocks of the Russia-Ukraine War, the economy of Ghana started deteriorating with worse inflation rates rising up to 54%, worse depreciation of the Cedi, from $1 to 5 Cedis to $1 to 15 Cedis etc.

President Akufo-Addo decided to use a home grown policy of E-levy to saved the economic challenges but fails to raise the needed revenue for economic stability. This forced Akufo-Addo’s Government to went back to the IMF for economic bailout, reaching a Staff-level agreement with the IMF in December 2022 supported by $3 billion Extend Credit Facility for three years up to 2026.

After the approval of the $3 billion IMF loan and subsequent release of the first $600 million tranche of the $3 billion in May 2023, the economy of Ghana started experiencing positive signs and since then there has been a gradual pick-up in the economic growth of the Country with Ghana experiencing 4.2% growth in the 1st quarter of 2023. The Cedi too has been relatively stable at $1 to 11. 55 Cedis, at least an improvement from the previous $1 to 15 Cedis.

The big question is, will Ghana be able to sustain its own economic growth and stability without IMF Bailouts after the end of Akufo-Addo’s IMF 3-year programme in 2026?

What confidence and assurance can Ghanaians have in the next President of Ghana after President Akufo-Addo as far as Ghana going back to the IMF again when the current IMF programme comes to an end in 2026?

Under the 4th Republican Constitution, all elected Presidents of Ghana have been to the IMF for economic bailout with:
1. Rawlings leading with 8 times.

2. Kufuor, once in 2003.

3.Professor Mills, once in 2009.

4. John Mahama, once in 2015.

4. Nana Akufo-Addo, once in 2022.

During IMF programmes, Ghana experienced some considerable level of economic growth with stable outlook. Immediately after the end of each IMF programme, the economy turns upside down with worsening economic conditions and negative outlook.

Honestly speaking and in all sincerity, the ongoing Domestic Debt Exchange Programme(DDEP) by the Ministry of Finance under Akufo-Addo’s Government will likely forced the next President and Government of Ghana to seek another IMF bailout when the current Akufo-Addo’s IMF Programme come to an end in 2026 else that particular President and Government may find it extremely difficult to honour all the debts that are currently going through Restructuring processes under the DDEP.

It is worthy to state that, the Debts been restructured under the DDEP were not only incurred by Akufo-Addo’s Government. Some of the Debts under the DDEP were incurred by previous Governments including the Government of John Mahama who is seeking another mandate in 2024.

On that basis, what Ghanaians are expecting to hear from the various 2024 Presidential Aspirants of NPP and John Mahama, the NDC 2024 Candidate is how they will be able to handle the economy of Ghana without IMF Bailouts when elected into office as President of the Republic of Ghana.

Too much talking, blabbering and braggadocious are becoming nuisance to the ears of majority of Ghanaians, gradually making Ghanaians losing trust and confidence in the political leadership of the country.