ACCRA – Ghanaian President Nana Akufo-Addo has defended the decision to seek assistance from the International Monetary Fund (IMF), saying there is a need to restore public finances after the twin shocks of the pandemic and the war in Ukraine.
The decision has sparked heated debate in Ghana, where Akufo-Addo has come under fire from critics who say his government has revised its stance on the IMF after initially saying a new tax would help revitalize the economy.
According to a statement, IMF officials are already in the West African country to help “restore macroeconomic stability, ensure debt sustainability and promote inclusive and sustainable growth”.
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Swearing in new envoys in the capital Accra, Akufo-Addo said on Thursday that the pandemic and the war in Ukraine had hit the global economy, with Africa feeling the pain more.
“All countries in the world are working to return to a state of normality after the devastating effects of the Covid-19 pandemic, the effects of which were exacerbated by the Russian invasion of Ukraine,” he said.
“In our case, we have decided to seek cooperation with the International Monetary Fund (IMF) to restore our public finances in the short term.”
He said the government will continue to work on medium and long-term structural changes to stimulate the economy.
This is the 18th time Ghana has requested IMF assistance, having secured a three-year deal in 2019 that provided $918 million in assistance.
Earlier this year, Ghana’s parliament approved a new electronic transaction tax which the government says will help generate $900 million in much-needed revenue, but which has drawn widespread public criticism.
The so-called e-levy will introduce a 1.5% tax on electronic money transfers and transactions, which the government says will help address issues ranging from unemployment to servicing Ghana’s high national debt.
For many Ghanaians, however, the tax represents an additional burden as they already grapple with a high cost of living, exacerbated by soaring fuel prices caused by the Ukraine crisis.
Ghana saw an inflation spike of more than 27% in May – the highest level in nearly two decades.
The president and his ministers have also cut their own salaries by 30% this year, along with other measures they hope will generate $400 million in savings for the Treasury.
- Editor/ main report by AFP