Incoming finance minister Cassiel Ato Forson says Ghana could seek more IMF funding

Incoming finance minister Cassiel Ato Forson says Ghana could seek more IMF funding! Ghana’s newly sworn-in government may seek additional financial support from the International Monetary Fund (IMF) under its ongoing three-year programme to stabilize the nation’s economy. Finance minister-designate Cassiel Ato Forson announced the plan on Thursday, emphasizing the need to address critical economic challenges.

Commitment to IMF Collaboration

Forson, who was nominated by President John Dramani Mahama for the pivotal finance minister role, reiterated the government’s commitment to working closely with the IMF. Speaking ahead of a meeting with an IMF delegation visiting Accra, Forson highlighted the need for supplementary funding to strengthen the economy.

“We are committed to working with the IMF, but we also want to ensure that we can raise additional financing by collaborating with the IMF and other domestic and international partners,” Forson told reporters.

Forson criticized Ghana’s reliance on Treasury bills for financing, describing it as “not very helpful” and underlined the importance of securing more sustainable financial mechanisms.

Reducing Wastage and Controlling Inflation

The 46-year-old chartered accountant, who holds a master’s degree in taxation from Oxford and a doctorate in finance, also announced plans to curb public spending to combat inflation and improve economic stability.

“There is a lot of wastage in the system, and we will cut them,” Forson stated. These measures, he explained, would not only lower inflation but also enable the government to resume domestic bond issuance by mid-year.

Addressing Debt and Restructuring

Ghana defaulted on most of its external debt in 2022, which led to a challenging restructuring process that is nearing completion. Forson confirmed that the government aims to finalize this process by negotiating with its non-Eurobond commercial creditors.

The restructuring of Ghana’s debt is critical for rebuilding investor confidence and restoring economic growth. Forson’s statements reflect the government’s commitment to addressing these issues transparently and efficiently.

Revisiting the IMF Bailout Deal

During his campaign, President Mahama pledged to renegotiate the terms of Ghana’s bailout deal with the IMF. However, market analysts suggest that Mahama has limited flexibility in this regard and is unlikely to deviate significantly from the existing programme.

Mahama’s campaign rhetoric echoed promises made by other reformist leaders in emerging markets, such as Sri Lanka’s Anura Kumara Dissanayake, who also vowed to reconsider IMF agreements.

Despite these challenges, Mahama has committed to rapidly assembling a government capable of addressing public discontent, revitalizing the economy, and creating jobs.

New Cabinet Appointments

In addition to Forson’s nomination as finance minister, Mahama has appointed John Abdulai Jinapor as energy minister and Dominic Akuritinga Ayine as attorney-general and justice minister. These appointments signal the government’s determination to address key economic and legal challenges.

Ministerial nominations must be approved by parliament, where Mahama’s National Democratic Congress (NDC) holds a two-thirds majority, ensuring a smooth confirmation process.

Overhauling the Cocoa Sector

Forson pledged significant reforms to Ghana’s cocoa sector, which has faced considerable challenges in recent years. As one of the world’s largest cocoa producers, Ghana’s economic stability is closely tied to this industry.

“We need to address issues of funding, diseased crops, and production. The entire sector requires an overhaul,” Forson stated.

Navigating Past Allegations

Forson, who served as deputy finance minister under Mahama’s previous administration, faced legal challenges related to alleged losses of public funds in an ambulance supply deal. However, he was acquitted by the courts, clearing the way for his return to public service.

Economic Recovery at the Forefront

Ghana’s new government inherits an economy grappling with its worst crisis in decades. Mahama’s administration has pledged to prioritize economic recovery, focusing on measures to restore stability, create jobs, and rebuild public trust.

As the government works to implement these reforms, the collaboration with the IMF and international partners will play a vital role in determining Ghana’s economic trajectory in the years ahead.

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