Ghana will solve debt crisis without IMF help, says finance minister

ACCRA, May 12 (Reuters) – Ghana has pledged to manage its debt without help from the International Monetary Fund (IMF), Finance Minister Ken Ofori-Atta said, expressing his belief that the government’s measures were advancing the country in the right direction.

Ghana’s total public debt, which stood at around 77% of its gross domestic product at the end of 2021, according to government data, has pushed one of West Africa’s largest economies to the brink. of the crisis.

The government announced a series of spending cuts in March to fight inflation, reduce the public deficit, restore a depreciating local currency and reassure frightened investors. Read more

But he always refused to ask for help from the IMF.

“We made a commitment not to return to the fund because … the fund knows we are [moving] in the right direction,” Ofori-Atta told a press conference in Accra, the capital.

“It’s about validating the program we have in place and finding other ways to manage our debt.”

The gold, oil and cocoa producer saw consumer inflation hit an 18-year high of nearly 24% in April despite efforts to contain price increases and spur the recovery.

Ofori-Atta said the priority would be to resolve the country’s domestic debt, which has interest rates three to four times higher than external debt.

“We have to decide for ourselves what structure would be useful to us,” he added.

In March, the central bank raised its main policy rate by a record 250 basis points and is expected to review this decision at an upcoming monetary policy committee meeting on May 23. read more

Ofori-Atta said another interest rate hike would be a “gut reaction” to “imported inflation”, noting that prices had continued to rise since the March increase.

“We have to find an approach that in some way gives us fiscal space,” he said.

Ghana’s credit ratings have been downgraded due to concerns over the government’s ability to pass legislation to boost revenue.

There has been fierce opposition to a tax on electronic payments approved in April and touted as a panacea to financial woes, with critics saying it will unfairly affect low-income people and small business owners. Read more

Reporting by Cooper Inveen; Written by Sofia Christensen Editing by James Macharia Chege, Alexandra Hudson

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