IMF is Our Best Bet for Now – Economist

Mr. Johnson Addai Asante, an Economics Lecturer at Kumasi Technical University, has emphasized that the government is taking the necessary step by seeking assistance from the International Monetary Fund (IMF) at this stage, given the country’s economic condition.

According to him, the country will continue to face economic challenges due to its heavy reliance on the ‘external sector,’ primarily imports.

He said that Ghana’s overreliance on imported goods has been a significant contributing factor to these economic issues. The lecturer pointed out that when a significant portion of the products available in the country are imported, it negatively impacts locally produced goods because they don’t sell as well as their foreign counterparts.

“We import so many things into the country to sell, and when that happens, the few products we manufacture here don’t sell as much as imported goods,” he said in an interview on Opemsuo Radio’s Nkwantannanso with Kofi Boakye.

Mr. Addae highlighted that the continuous importation of goods also exerts pressure on exchange rates and contributes to inflation.

“Even when global petrol prices remain stable, Ghana sees an increase in fuel prices due to the surge in foreign exchange rates. This, in turn, leads to elevated costs of goods for consumers,” he added.

He proposed that maintaining, if not reducing, exchange rate fluctuations would alleviate some of the economic difficulties experienced by Ghanaians.

“Like Bawumia said, the economy depends on the exchange rate so if we are able to maintain the exchange rate to even not decrease but stabilise, it will help reduce the hardship.”

Mr. Addae urged the government to consider implementing import quotas and promote local production to address the trade deficit. This approach would help reduce the country’s dependency on imports and support local industries.

Ghana is on track to receive approximately US$600 million from the IMF after the approval of the Executive Board. This financial support comes after a Staff-Level Agreement was reached during discussions with the IMF Mission yesterday.

Mr. Stephane Roudet, IMF Mission Chief for Ghana, announced the forthcoming funds, stating, “Ghana will have access to about US$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board.”

“Upon completion of the Executive Board review, Ghana would have access to SDR 451.3 million (about US$600m), bringing the total IMF financial support to SDR 902.8m (about US$1.2m).”