Ghana’s new government may seek additional funding from the International Monetary Fund (IMF) under its ongoing three-year program to support the economy, Finance Minister-designate Cassiel Ato Forson announced on Thursday.
President John Dramani Mahama, who was sworn in this week after defeating the ruling party’s candidate in December’s election, appointed Forson, the former minority leader in parliament, to serve as finance minister.
“We are committed to working with the IMF, but we also aim to secure additional financing, collaborating with the IMF and other domestic and international partners,” Forson told reporters ahead of a meeting with an IMF team currently visiting Accra.
Forson, who previously served as a deputy finance minister, acknowledged that reliance on Treasury bills has not been effective in addressing the country’s financial challenges.
While the IMF has not yet commented, Forson, a 46-year-old chartered accountant with a Master’s degree in taxation from Oxford and a doctorate in finance from a local university, stated that the new administration would focus on reducing public spending to help bring down inflation further.
“There is a lot of wastage in the system, and we will cut it,” he said, adding that these measures would also enable the government to restart domestic bond issuance by mid-year.
Ghana, a major gold and cocoa producer, defaulted on most of its external debt in 2022, leading to a challenging debt restructuring process, which is nearing completion.
Forson noted that Mahama’s government would finalize the restructuring by reaching an agreement with non-Eurobond commercial creditors.
Regarding the IMF deal, Mahama, who previously served as president from 2012-2017, had pledged to renegotiate the terms of the country’s bailout deal with the IMF during his campaign.
However, market participants believe that while Mahama may attempt to revisit the terms, he has limited flexibility and is unlikely to abandon the current IMF program.
His promise mirrored those of other reformist candidates elected into office in emerging markets last year, including Sri Lanka’s Anura Kumara Dissanayake, who rode on a promise of reconsidering the terms of an IMF programme and debt restructuring.
Mahama has pledged to swiftly assemble a government able to rapidly address growing discontent by boosting the economy and creating jobs.
He also picked John Abdulai Jinapor to serve as energy minister and Dominic Akuritinga Ayine to the post of attorney general and justice minister, the presidency said on Thursday.
The new government has inherited an economy emerging from its worst crisis in a generation.
Ministerial nominees have to be approved by Parliament, where Mahama’s National Democratic Congress (NDC) party holds a two-thirds majority.
Forson pledged to overhaul the management of the crucial cocoa sector, which has been facing challenges in recent years.
“We need to look at the issues of funding, diseased crops and production very well. The whole sector needs an overhaul,” he said.
Forson was charged in connection with the loss of public funds through an ambulance supply deal when he was deputy finance minister, before being acquitted by the courts.
