FULL TEXT: Dr. Bawumia’s Speech On Ghana’s IMF Return

Vice President Dr. Mahamudu Bawumia, speaking at the official launch of the Accra Business School’s IT Programmes on Thursday, 14th July 2022 said: “with enhanced fiscal discipline and structural reforms to restore debt sustainability and growth, we should emerge stronger than we have with the previous 17 IMF programs”.

“But it will take hard work and difficult decisions. With great pride and personal pleasure, it is good that we are all part of this launch of three new programmes by the Accra Business School in collaboration with the South East Technical University," he said. 

“If you take out the fiscal impact of this quadruple whammy, Ghana will not be going to the IMF for support because our fiscal, debt and balance of payments outlook would be sustainable. Of the four factors, two (COVID-19 and the Russia-Ukraine war) were external and the other two (the banking sector clean-up and the excess capacity payments) were the result of policies of the previous government," he added.

He explained why the government is seeking financial assistance from the International Monetary Fund (IMF) despite earlier claims that the economy was buoyant.

He noted that in the midst of the worsening economic challenges, the government’s options for generating enough revenue were limited, forcing the country to run to the IMF for support.

“In the midst of this global crisis, Ghana’s fiscal and debt sustainability has worsened. Some commentators have argued that the expenditures by government alone could not be the reason for the large increase in the fiscal deficit of the debt stock. In fact they are right.”
“Covid-19 expenditures alone were not the reason for the increase in Ghana’s debt stock by the end of 2021. In fact, as I stated in my April 7th lecture, in addition to COVID-19, there were two major items of expenditure that are critical to understanding the evolution of the fiscal deficit and the debt stock: the Banking Sector Clean-up (GH¢25 billion) and the Energy Sector Excess Capacity payments (GH¢ 7 billion),” he explained.

The Vice President disclosed that government intends to introduce a policy that will authorize the Bank of Ghana to purchase any amount of gold mined in Ghana to generate more revenue.

The IMF concluded its visit to Ghana on Wednesday, July 13, 2022.

IMF again reaffirmed its commitment to support Ghana.

Below is the full text of his speech