Ghana’s new finance minister suggests that the country look for further IMF funding

According to Cassiel Ato Forson, the finance minister-designate, Ghana’s new government may ask the IMF for more cash under its existing three-year agreement with the lender to help stabilize the country’s economy.

The former minority leader in parliament was chosen to fill the important position of finance minister by President John Dramani Mahama, who took office last week after defeating the candidate of the ruling party in the December election.

Forson told reporters, “We are committed to working with the IMF, but we also want to ensure that we can raise financing; additional finance, working with IMF and other domestic, international partners,” before to a meeting with an IMF team present in Accra.

“The reliance on Treasury bills and others has not been very helpful,” Forson, a former deputy finance minister, stated.

A request for comment was not immediately answered by the IMF.

In order to further reduce inflation, the new government would also reduce public spending, according to Forson, a 46-year-old chartered accountant with a master’s degree in taxes from Oxford and a PhD in finance from a nearby university.

He declared, “There is a lot of waste in the system, and we will cut them,” adding that the action would also enable the government to resume issuing domestic bonds by the middle of the year.

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The West African cocoa and gold producer went into harsh restructuring at the end of 2022 after defaulting on the majority of its foreign debt.

According to Forson, Mahama’s administration will reach an agreement with its commercial creditors who are not Eurobond holders to wrap up the process.

REVIEWING THE IMF DEAL

During the campaign, the incoming president, who had served from 2012 to 2017, promised to renegotiate the conditions of Ghana’s rescue agreement with the IMF.

However, despite that campaign rhetoric, market participants believe he had little leeway and was unlikely to leave the present IMF program.

His pledge was similar to that of other reformist candidates elected to power in emerging markets last year, such as Anura Kumara Dissanayake of Sri Lanka, who ran on a platform of debt restructuring and a review of the conditions of an IMF program.

Mahama has promised to quickly form an administration that can increase the economy and create jobs in order to quickly address the mounting dissatisfaction.

According to the presidency on Thursday, he also appointed Dominic Akuritinga Ayine as the attorney general and justice minister and John Abdulai Jinapor as the minister of energy.

The economy that the new administration took over is recovering from the greatest crisis in a generation.

Parliament, where Mahama’s National Democratic Congress (NDC) party has a two-thirds majority, must confirm ministerial nominees.

Forson promised to restructure the administration of the vital cocoa industry, which has been struggling lately.

“We must carefully examine the problems of production, damaged crops, and funding. “An overhaul of the entire sector is necessary,” he stated.

During his tenure as deputy finance minister, Forson was accused of embezzling public funds through an ambulance supply arrangement; nevertheless, the courts cleared him.