For the Board of the International Monetary Fund (IMF) to approve Ghana’s $3 billion bailout at the end of this month, Ghana needs to achieve three critical milestones this week.

Ghana has started to actively engage external debtors with the view to getting debt cancellation, especially from the Paris club of creditors.

The first stop of a government delegation seeking debt restructuring will be in China as that country holds $1.7 billion out of Ghana’s $5.7 billion bilateral debt.

Delegation to China

Finance Minister, Ken Ofori-Atta left Accra yesterday leading a high-powered government delegation to China to negotiate for the acceptance of the country’s proposal for debt cancellation with the Paris club.

The delegation will hold discussions with officials of the finance ministry of China, the central bank of China, and China’s Eximbank, principally over how to cross the debt restructuring line with China, ideally as part of the common framework with the Paris Club, which also includes Russia.

The Chinese who are not members of the Paris Club have so far dragged their feet.

Other non-member creditors like Saudi Arabia and India on the other hand, are expected to join the Paris Club meetings.

Delegation to meet Paris Club in France

From China, the delegation will travel to Paris in France to hold discussions with the Paris Club tomorrow, Tuesday, March 21, 2023.

That meeting is most critical in determining how quickly Ghana can secure the IMF deal.

In January, all member countries of the G20 group of economic powers said they are on board for a restructuring of Ghana’s debt and Paris Club members are ready to take the first step toward forming a creditor committee.

The work of the Committee will, typically, take about three weeks.

Tuesday’s meeting will set the ball rolling and give Ghana the greatest indication yet as to how quickly the anticipated IMF deal can be closed.

Forming a creditor committee took a couple months for previous cases, however the official said the Paris Club members were all ready to do so for Ghana and hoped it could be done in a month.

The official said Ghana’s case was less complex than Zambia, whose case the official said was progressing after struggling since it became the first African country to default after the pandemic.

The programme, which was launched in 2020, was supposed to streamline the process of coordinating among creditor governments the restructuring of low-income countries’ debts after the pandemic.

However, progress has proven glacial for the first cases; a situation Western countries say is in part due to a lack of restructuring experience by China, a non-Paris Club G20 creditor that has become a major lender in recent years.

 3 Bills Parliament must pass

On Thursday Parliament will vote on three key revenue bills which must be passed to indicate Ghana’s seriousness and doing better than being below the continental average on revenue mobilisation.

The bills are the Income Tax (Amendment) Bill, the Excise Duty & Excise Tax Stamp (Amendment) Bills and the Growth and Sustainability Levy Bill.

The passage of these bills and a successful meeting with the Paris Club are the most crucial things the IMF Board will require to approval the deal for Ghana.

Ghanaians now can only wait and see the timetable to be set by the 22-member nations Paris Club, which holds majority of the country’s bilateral debts.

But, Ghanaian officials have been having prior engagements with the creditor nations involved, why should all help speed up the process.

Ghana hopes Ofori-Atta’s trip can help get China to join the Paris Club meetings, which will agree on a common framework for all its member creditors, including Belgium, UK, USA, Japan, Denmark and the Netherlands.

Alternatively, failing which, Ghana can do a separate bilateral deal with China, but on similar principles of restructuring. That is also at the heart of the Ghanaian delegation’s business in China this week. The team should return next Sunday.

Parliamentary action

The nation’s fate after the successful implementation of the Domestic Debt Exchange Programme is also now heavily dependent on Parliament who meet this Thursday 23 March to vote on the three revenue bills.

Members of Parliament from the National Democratic Congress caucus have been directed by the NDC secretariat to vote against the three bills.

Minority Leader, Cassiel Ato Forson last week  suggested that the seeming delay in agreeing on a debt restructuring deal with China is what could kill the IMF deal but was silent on the bills the House is required to pass.

The China factor

Ofori-Atta who left Accra Sunday afternoon will first stop over in Addis Ababa, Ethiopia, to attend the African Finance Ministers’ meeting, which will revolve around the continent’s suffocating debts.

He will meet United Nations Economic Commission for Africa (UNECA) as well, again on concerns over Africa’s growing indebtedness, especially since Covid-19.

Negotiation with external creditors

Negotiations with Eurobond holders are said to have been significantly smoothened since the successful completion of the Domestic Debt Exchange Programme (DDEP) and   in principle, a  framework of a deal with holders of  Eurobond has been fashioned out.

Ghanaian officials have met with all executive directors of the IMF, including Germany, the United Kingdom, France, Japan, and the USA.

Ghana will most likely be looking after the Spring Meetings of the IMF and World Bank in Washington DC, which will take place from April 10 to 16 2023, for the IMF Executive Board.

The IMF and Ghana reached a staff-level agreement on the U$3 billion loan deal in December 2022. Ghana was expected to conclude its domestic debt restructuring by end of January but that was also delayed due to an understandable struggle with bondholders and their representatives on the nature, structure and scope of the domestic debt exchange exercise.

The decision by the Paris Club to only now meet on Ghana has also meant that the IMF deal will have to wait for the work of the Paris Club’s Creditors Committee to be completed on the common framework first.

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An aspiring flagbearer of the New Patriotic Party (NPP) for the 2024 election, Dr Owusu Afriyie Akoto, who until recently was Ghana’s Food and Agriculture Minister, has said that his administration, when elected,  will lift Ghana out of the cycle of poverty, through massive investment in the agricural sector.
This, he assures, will not only boost food and nutrition security, but also, generate the necessary resources for the development of the other sectors including industry, health, education and infrastructure in the medium to long term.

He made this pledge when he delivered a speech titled, ‘the future of the economy of Ghana; transforming agriculture for the prosperity of all,’ at the University of Professional Studies – Accra, yesterday.

Food Security and agricultural investment

Dr Akoto predicted that food, renewable energy, water and big data, will drive the new economic order which will come, and Ghana has the potential to lead this new order by strengthening all sectors of the economy and transforming agriculture sustainably to feed and enrich its people, whilst contributing to the food and nutrition needs of the estimated 9.7 billion global population by 2050.

He noted that the development of many of the most advanced countries was tied to the investment in, and growth of the agricultural sector.

Dr Akoto pointed to the examples of countries like Brazil, China, Malaysia and Thailand who in recent times have ridden on the back of growth in the agricultural sector to develop their countries.

Similarly, countries in the European Union like Germany, France, Italy, Spain, and the UK, have shown that investments in agriculture can impact economic transformation.

This was the case in the period between 2000 and 2020 when through concerted development of improved varieties of crops, and the scaling up of same increased yields, improved market and trade conditions, contributed to the increase in world food supply, security and trade.

This drive was indispensable for combating hunger and malnutrition in the EU.

This project injected 26 billion Euros into the EU economy, as well as created and secured more than 90,000 direct jobs in its agricultural value chain.

In view of this lesson from elsewhere, Dr Akoto pointed to a number of initiatives taken while he was in office to boost agricultural production in the country.

1.7m farmers

These include the procurement and distribution of about 1.4 million metric tonnes of fertilizer and 93,192MT of improved seeds which were distributed to over 1.7 million farmers from 2017 to 2021.

GH₵2.6bn subsidies on seeds and fertilizer

Further to that, an investment amount of about GH₵2.6 billion was made as subsidy on improved seeds and fertilizers in the same period the period.

These led to maize yields in the country increasing from around 1.8 Metric Tonnes per hectare to three metric tonnes per hectare.

Similarly, rice and soya yield in the country increased from 2.7 metric tonnes per hectare to four metric tonnes per hectare and from one metric tonne per hectare to 2.5 metric tonnes per hectare, respectively.

Planting for Food and Jobs

Dr Akoto also stated that with the introduction of the Planting for Food and Jobs (PFJ) intervention, production of maize rose from 1.7 million MT in 2016 to 3.6 million MT in 2021.

Rice production rose to 1.2m MT

Rice rose from 688,000MT to 1.2 million MT and soya from 143,000 MT to 230,000 MT over the same period.

By 2021, the beneficiaries had grown to 1.7 million farmers out of a total farmer population of 3.1million in Ghana, up from an initial 202,000 farmers.

Tree Crop Diversification

Dr Akoto also said that there are lessons to be learnt from Ghanaians frequent visits to the International Monetary Fund (IMF) for debt assistance, key among which is “the urgent need to expand the export earning capacity of the economy.”

He thus stressed that “only the agricultural sector can establish that capacity to achieve sustained rapid economic growth.”

“I strongly believe that prioritising agriculture is a sure way for achieving the accelerated growth needed in the other sectors of the economy and creating the needed jobs for our people.”

He touted how he initiated the establishment of the Tree crop Development Authorityto coordinate and promote the development of six tree crops – cashew, rubber, oil palm, coconut, mango and shea, with the aim of developing, producing and distributing the selected cash crop seedlings to farmers to produce and generate a combined potential of export earnings of between $6 billion to $12 billion per year after 8-10 years of implementation.

Cocoa

Besides these selected crops, he also focused on the development of the cocoa sector, where he talked about the designing of the National Cocoa Rehabilitation Programme (NCRP) in 2020 to renew the productive capacity of the cocoa industry.

According to him, this was done to scale up the promotion and production of Cocoa to provide more income to the economy and farmers and create more jobs.

This was a huge success, as thousands of farmers who had abandoned their farms, mainly due to the effects of the Swollen Shoot Virus Disease  returned to them.

Due to this programme, he said, a total farm area of about 56,343 hectares had been fully treated across the cocoa growing regions of Ghana as of September 30, 2022.

Dr Akoto was optimistic that when fully implemented, the NCRP should generate more foreign exchange earnings from cocoa.

Poultry Sector

He indicated that as part of efforts to assuage the suffering of the nation’s poultry farmers, he would establish a Grain Development Authority (GDA) whose major duty will be to address the cost of feed.

He said that the GDA “will purchase grains at the time of harvest when the prices are low, store the grains and release them to the poultry farmers and other stakeholders in the value Chain.”

Additionally, when seasonal prices rise, various interventions have been made to increase production in other areas of the Livestock industry.

Dr Akoto further stated that his administration will regulate the importation of chicken and other meat products.

Agric mechanisation

The flagbearer hopeful revealed that since 2017, the Ministry has received and distributed a total of 12,200 pieces of agricultural machinery and equipment from Brazil, Czech Republic and China at 40% subsidy to farmers around the country.

These include tractors, harvesters, irrigation equipment, food processing and post-harvest management equipment.

Additionally, a tractor assembling plant is being established near Ejisu in the Ashanti Region.

He again revealed that processes have been concluded with the Exim Bank of India to provide a facility to import $150 million worth of farm and agro-processing machinery, which are expected to be delivered in Ghana in the course of the year.

According to him, some 32 District Assemblies and selected private sector operators have benefitted from a scheme to create Agricultural Mechanisation Centres to provide hiring Services to both small- and large-scale farmers.

The Presidential Aspirant also touted the role he played in the establishment of the Grains Development Authority (GDA), the development of a memorandum proposing legislation requiring all commercial banks to increase loanable funds to Agriculture and its value chains, which has been submitted to Cabinet, as well as the draft Cabinet Memoranda for the establishment of the Horticultural Development Authority and the Poultry Development Authority.

Women in Agriculture

Dr Akoto also expressed the view that if issues of illiteracy, lack of knowledge
or appreciation of technology, land acquisition and ownership issues, amongst
others is addressed among women farmers, who contribute to over 70% of food crop production in the country, productivity will increase significantly.

Political Will

Touching on his vision of a prosperous Ghana, he said that there was the need to “prioritize agricultural transformation at the highest level of government through the implementation of a well-defined vision and strategy. The investments needed to achieve sustainable food systems will be non-negotiable in my vision to transform agriculture for the prosperity of all.”

He also stated that in addition to the Economic Management Team headed by the Vice-President, there shall be a newly created Agricultural Management Team (AMT) which shall comprise seven Agric-related Ministries, namely: Food and Agriculture, Finance, Trade and Industry, Lands and Natural Resources, Transport, Local Government and Rural Development, and Environment, Science, Technology and Innovation.

This AMT shall be chaired by the President himself to drive agricultural development.

Supply chain logistics and market access

To improve supply chain logistics and expand market access, the former Agric Minister said that infrastructure projects such as feeder roads, hospitals, housing, rural electrification, irrigation, storage will be integral in the agricultural transformation agenda.

Big data and technology for evidence-based decision making

He also indicated that “significant Investments shall be made in big data and technology for precise and evidence-based decision making in partnership with the Private Sector.”

Research and Development

Dr Akoto also promised to appropriately fund the research endeavours of the diverse national agricultural research institutions, including the universities, in areas such as agronomy, extension, plant breeding, Integrated soil fertility management (ISFM),
integrated pest and disease management (IPDM), post-harvest management
(PHM) and climate-smart technologies.

He said, “we need to curb the effects of climate change and sustain yields in farmers’ fields, we must grow crops that are resilient to withstand drought, heavy rains and heat.
Sustainable investment in science, technology and innovation in agricultural
development will offer prosperity to all, including small holder farmers.”

Development and Strengthening of Input and Output Market Systems

The Aspirant pledged to “establish an appropriate regulatory framework to leverage private-sector investment across all sectors and promote the efficient distribution of agro-inputs.”

In addition to this, he indicated that the regulatory framework will seek to develop platforms for agricultural innovations, output market structures and incentives that allow for the full realization of the value of increased production.

“A well-funded and competitive private sector can manage and allocate skill and
capital to scale-up agro-processing, value addition and drive long-term, sustainable
agribusiness growth for job creation,” he said.

Fundamental to all this is the adoption of a comprehensive strategy develop the human capital needed to take innovations to scale, along the entire agricultural commodity value chains.

He identified the establishment of farmer field schools, demonstration plots, development of agropreneurs, training of agricultural extension agents and value chain actors to improve efficiency as key to the success of this initiative.

He also promised to support social development programmes aimed at reducing illiteracy among rural households and farmers, to increase the adoption of new technologies.
He stated that his administration will develop curricula that will equip students with
the mindset, knowledge and skills for agricultural education.

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President Nana Akufo-Addo has rejected accusations of reckless borrowing and expenditure over the past six years.

Social amenities and infrastructure

According to him, the borrowed funds have been spent on projects and programmes that inured to the benefits of citizens in terms of providing social amenities and basic infrastructure.

Expenditure on key sectors  

“Yes, I have been in a hurry to get things done, and this includes massive developments in agriculture, education, health, irrigation, roads, rails, ports, airports, sea defence, digitisation, social protection programmes, industrialisation, and tourism.

“We can be justifiably proud of the many things we have managed to do in the past six years,” he stated.

Not all debts contracted in 6 years

Delivering the State of the Nation Address (SONA) in Parliament, President Nana Akufo-Addo said the debts being serviced were not only contracted during the period of this administration.

SONA

SONA is in accordance with Article 67 of the 1992 Constitution of Ghana, which states that the President shall deliver a message on the SONA to Parliament at the start of each session and before the dissolution of Parliament.

SONA is a constitutional obligation and yearly tradition, wherein the Commander-In-Chief of the Ghana Armed Forces reports on the status of the country, unveils the Government’s agenda for the coming year, and proposes to Parliament certain legislative measures.

To that end, Article 67 of the 1992 Constitution of Ghana imposes an obligation on Members of Parliament, the Speaker, and the Judiciary to receive the President’s SONA.

President Nana Akufo-Addo said “We have spent money on things that are urgent, to build roads and bridges and schools, to train our young people and equip them to face a competitive world.

“Considering the amount of work that still needs to be done on the state of our roads, the bridges that have to be built, considering the number of classrooms that need to be built, the furniture and equipment needs at all stages of education, considering the number of children who should be in school and are not, considering the number of towns and villages that still do not have access to potable water, I daresay no one can suggest we have over borrowed or spent recklessly,” he stressed.

Innovative policies and execution of projects

President Nana Akufo-Addo is proud that his Administration has over the last six years championed innovative policies and execution of projects that have helped improved the quality of life of the Ghanaian people.

He pledged to continue on a path that brings the most benefit to the people of Ghana.

Built more roads

He boasted that his government has built more roads and constructed more railways than any government in the history of the 4th Republic.

Ghana Card, Zongo Development Fund

Beyond the construction of roads, he said, the New Patriotic Party (NPP) Administration had also implemented successfully a National Identification System with the Ghana Card, and also established the Zongo Development Fund to address the needs of Zongo and inner-city communities.

Access to toilet facilities

“We have constructed more infrastructure in the Zongo Communities than any other government in the Fourth Republic,” he stressed, adding that the Government had worked assiduously to increase the proportion of the population with access to toilet facilities from 33% to 59%.

Public libraries increased from 61 to 115

“There has also been an increase in the number of public libraries from 61 from independence until 2017 to 115 in 2022;” he said.

Retooling security agencies

President Nana Akufo-Addo said government had provided more equipment, that is, vehicles, ammunition, among others, to security services than any other government in the Fourth Republic, while successfully implementing the Digital Address System.

106 1D1F companies operational

On industrialisation, he said, in four years, 106 companies had been completed and in operation under the ‘One District, One Factory (1D1F).

148 1D1F factories under construction

According to him, 148 factories are under construction-the largest expansion of that sector since independence.

Largest medical drone delivery service saving lives

On health, he indicated that his Administration had introduced drones in the delivery of critical medicine, vaccines and blood to people in remote parts of the country.“Today, Ghana has the largest medical drone delivery service in the world with six Zipline Distribution Centres in Omenako, Mpanya, Vobsi, Sefwi Wiawso, Kete Krachi and Anum,” the President stated.

Rehabilitation and modernisation of large-scale irrigation schemes

On agriculture, the President said, in 2022, the Government completed the rehabilitation and modernisation of large-scale irrigation schemes at Tono, Kpong and Kpong Left Bank projects.

6,766 hectares of irrigable land

“The three schemes are expected to provide 6,766 hectares of irrigable land for all-year-round crop production,” he stated.

Tamne Irrigation Project

Phases One and Two of the Tamne Irrigation Project had also been completed, with Phase Three of the project at 57% completion.

$29.9 million worth of machinery and equipment

He said government has procured $29.9 million worth of machinery and equipment to boost agriculture mechanisation in Ghana.

He said government would this year, start preparatory works for the establishment of a Tractor and Backhoe Loader Assembly factory in the Ashanti Region and continuous capacity building of operators to ensure optimal management and lengthen the lifespan of agricultural machinery.

65 warehouses completed

President Akufo-Addo said the Government had constructed 65 warehouses, with 15 others at advanced stages of completion, to help address the vexed issue of post-harvest losses.

“This intervention is adding some eighty thousand metric tonnes (80,000mt) to national grain storage capacity,” he stated.

Decisions to save lives during COVID-19

President Nana Akufo-Addo said the government during the peak of COVID-19 on the African continent had to make decisions which based on science were the most reliable and trusted ways to save lives and livelihoods at the time.

According to him, though these decisions might look unnecessary and strange today, criminality or reckless spending cannot be ascribed to measures such as fumigation of public spaces, provision of GH₵518 million in grants and loans to Micro, Small and Medium-scale Enterprises (MSMEs) and preparing and distribution of hot meals to the vulnerable in society.

“In dealing with the crisis generally, I did not meet anyone brave enough to suggest that considerations of money should be a hindrance to anything we needed to do in the fight against the virus,” he said.

COVID-19 funds audit

The President also noted that the importance of not losing public confidence during the challenging times led the government to ask for the audit of the COVID funds.

COVID-19 funds used well

“And I can assure this House that nothing dishonourable was done with the COVID funds. The responses from the Ministers for Health and Finance, on January 23 and 25, 2023, respectively, have sufficiently laid to rest the queries from the Auditor General’s report.

“No auditor can put a figure on the cost of keeping the children in school safely during that crisis, nor the continuing cost of the effect of the pandemic on our young people; not the financial cost, not the emotional cost, and certainly not the social cost,” the President said.

International Monetary Fund

President Nana Akufo-Addo announced that the International Monetary Fund (IMF) staff will present Ghana’s request for a loan programme to its executive board by the end of the month.

Ghana secured a staff-level agreement with the IMF in December for a $3 billion loan, but approval is contingent on it restructuring its debt of GH₵575.7 billion ($47.6 billion).

“We are on course for the IMF staff to present to the IMF executive board Ghana’s programme request for a $3 billion extended credit facility by the end of the month,”  he added.

COVID-19, Russia-Ukraine war, soaring energy and food prices, higher interest rates, a strong dollar and a global slowdown negatively affected the economy.

President Nana Akufo-Addo explained that prior to the onset of the exogenous forces, his administration in three years reduced inflation to its lowest level (7.8% in January 2020) since 1992.

He added that for the first time in over 40 years, government recorded a fiscal deficit below five percent of Gross Domestic Products (GDP) for three years in a row.

For the first time in over 20 years, he stated that the balance of trade (that is the difference between our exports and imports) has been in surplus for three consecutive years.

He stated that current account deficit is shrinking, interest rates declining, and the average annual rate of depreciation of the cedi was at its lowest for any first term government in the Fourth Republic.

He recalled that economic growth rebounded to place Ghana among the fastest growing economies in the world for three years in a row at an annual average of 7%, up from 3.4% in 2016, the lowest in nearly three decades.

“The international investor community has recognised this development, resulting in Ghana, today, being the largest recipient of foreign direct investment in West Africa.

“The sovereign credit ratings agencies upgraded ratings, and also improved the outlook for this year, notwithstanding the fact that it is an election year,” he stressed.

Turning to security issues, the president said that while he did worry about the extraordinary expenditure on security at the country’s borders, Ghana had no choice but to spend resources to keep its borders safe.

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• COCOBOD intercepts over 1,500 bags of cocoa being smuggled – 20 March 2023
• 3 hurdles to clear this week for IMF board to approve $3bn bailout – 20 March 2023
• Nana tasks CID to probe Prof Frimpong-Boateng’s galamsey claims  – 20 March 2023