Ghanaian President Nana Akufo-Addo addressed the nation in a half-hour address broadcast on Sunday to explain the raft of actions his government will take to get out of financial trouble, including measures to encourage domestic industry.
Nana Akufo-Addo announced a 30% cut in budgeted discretionary spending and salaries for the President, Vice President, Ministers, Deputy Ministers, and political officeholders among these measures.
“We are in a crisis, I do not exaggerate when I say so. I cannot find an example in history when so many evil forces have come together at the same time.
“But, as we have shown in other circumstances, we shall turn this crisis into an opportunity to resolve not just the short-term, urgent problems, but the long-term structural problems that continue to bedevil our economy,” He stated
The emergence of the Covid-19 epidemic signaled the beginning of a period of disenchantment. Growth stagnated, and the cost of borrowing money in the markets rose.
The influence of the Russian-Ukrainian conflict on global food and energy prices worsened these challenges. Inflation in the country has risen to more than 37%, while the currency has depreciated at an unanticipated rate: the cedi has lost more than 40% versus the dollar since the beginning of the year.
Most crucially, debt, Ghana’s Achilles heel, has skyrocketed. It now contributes to about 80% of the country’s total GDP.
The Accra government has broken its three-year strike demanding IMF funding due to an untenable load.
This is the IMF’s 17th request for a fresh aid plan since the country’s independence in 1957, a difficult pill for the African powerhouse to swallow.
“We have gone to the (International Monetary) Fund to repair, in the short term, our public finances, and restore our balance of payments, whilst we continue to work on the medium to long-term structural changes that are at the heart of our goal of constructing a resilient, robust Ghanaian economy and building a Ghana beyond aid.”