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Duffuor laments: We can’t wait for IMF; Ghana is sinking

The Covid-19 or Russia-Ukraine war cannot be the cause of the depreciation of the cedi, according to the former governor of the Bank of Ghana.
According to his opinion, the government must act quickly to get Ghana out of its current economic rut if it hopes to avoid defaulting on its mounting debt.

“Fifteen African countries have registered single-digit inflation during this same period including Togo, Ivory Coast, Morocco, Kenya, Uganda and so on. These countries didn’t jump over Covid-19 or the Russia – Ukraine war. We are doing something wrong in Ghana, it is a leadership problem,” he noted.

Dr. Kwabena Duffuor rather blamed the pressure on the Ghanaian cedi to a shortage of US dollars in the economy as a result of excessive government borrowing as well as structural flaws in our arrangements for mineral and oil exports to balance our payments in an interview with Joy News.

“Less than 20% of our total export earning impacts on Bank of Ghana’s cash flow, according to data from the Ministry of Finance itself. That is a big problem’’. He continued,

“take for example oil exports for 2021. Ghana exported 3.9b USD worth of oil but Ghana actually earned only 513m USD out of the total export while 3.4b USD went to the owners of the oil companies’’.

The structural problems with our balance of payments are due to the fact that Ghana spent USD 2.7 billion at the same time to purchase petroleum products for domestic use.

Inflation was a problem for Ghana’s economy, according to the former governor of the Bank of Ghana, when he served as finance minister under President John Evans Atta Mills. However, using recommendations from the Economic Advisory Council, which President Mills had established and which included Togbe Afede XIV, Professor Kwesi Botwe, and Dr. Gobind Nankani of the World Bank as members, prudent monetary policies were developed to stabilize the cedi.

“We cut down government expenditure drastically especially when there is a revenue shortfall and you cannot borrow anymore…”

According to the former finance minister, the administration must take some of these actions immediately because the nation is in financial trouble and cannot wait for the IMF.

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