Constituent policy

Ghana’s Hard Works – Fiscal and Monetary Policy

There are eight weeks left before the end of the year. They will be busy. This week, the statistical service is expected to release new data on inflation1. Less than a week later, the Minister of Finance must present the 2023 budget. His sixth and perhaps the most significant. At least it was planned…

According to Majority Leader Osei Kyei Mensah Bonsu, the bill could be delayed to accommodate ongoing negotiations with the IMF which the president says are at an advanced stage and will be completed before the end of the year. In the meantime, the government will disburse $265 million in Eurobond coupon payments while funds from the $1.1 billion COCOBOD syndicated loan continue to work their way into the local economy. And before the end of this month, the Monetary Policy Committee (MPC) of the Bank of Ghana will hold its last meeting scheduled for 2022 and then release its decision amid dramatic inflation and depreciation of the national currency, rising rates and war abroad.

Predictably, economic distress is accompanied by tensions in the political landscape. Finance Minister Ken Ofori-Atta has become a hotbed of dissatisfaction.


The program

According to the most recent official data – the Ghanaian Cedi has fallen 54% against the US dollar since the start of the year, consumer price inflation was 37.2% in September, the producer price inflation was 46.0% in August, the fiscal deficit in September was equivalent to 6.4% of GDP against a target of 5.0% of GDP due to revenue underperformance, and provisional growth figures for the first half suggest a slowdown in the non-oil economy. Clearly, the market and the country need clarity on policy direction. To this end, in a major address on October 30, President Nana Addo Dankwa Akuffo Addo proposed the following:

  • Goals. (a) Reduce total public debt from 68% of GDP, according to October estimates by the Bank of Ghana, to 55% of GDP by 2028 and reduce annual external debt servicing costs by about 50 % to 18% of annual revenue, (b) increase tax revenue from 13% to 18-20% over the same period.

  • Political plans. (a) To conclude an agreement with the IMF by the end of the year, (b) via the guidelines of the Bank of Ghana, “ensure” that foreign exchange earnings from mining production and hydrocarbons are initially held by local banks, (c) pursue enhanced supervision of foreign exchange bureau markets, and (d) review “the standards required for imports into the country” and the management of foreign exchange reserves in relation to imports of production… “which, with increased support from the government and that of the banking sector, can be manufactured and produced in sufficient quantities in Ghana”… before providing an update on the situation again in May 2023.

  • Warranties. The president said there will be “no haircuts”, that “no individual or institutional investor, including pension funds, in treasury bills or government instruments will lose their money at further to our ongoing negotiations with the IMF”.

  • Common cause. The president said “money doesn’t like noise” and encouraged his compatriots to talk about currency.


These four bullet points illustrate in part the government’s difficulty in delivering a consistent, compelling and enduring message to its constituents at home and abroad. Neither forcing extractive companies to keep their profits in Ghana nor Nigerian exchange controls seem compatible with an IMF program. And some sort of debt restructuring is needed. The promise that there will be no haircut without explaining how or why assumes a level of trust and goodwill that no longer exists. Not even within the ruling party itself.

There are 275 lawmakers in parliament, 138 from President Akufo Addo’s New Patriotic Party (NPP).2 and 137 from the opposition National Democratic Congress (NDC). Such a slim majority has always been a strategic vulnerability for the government agenda. President Akufo-Addo’s 2021 State of the Nation Address suggested that a new, more collegial, cross-party parliamentary modus operandi may emerge as a result. He does not have3. And now the government’s ability to turn even its own caucus into a united platform is under strain.

Indeed, in the last week of October, eighty parliamentarians from the NPP gave a press briefing demanding the scalp of the Minister of Finance and Minister of State at the Ministry of Finance, Charles Adu Boahen. The group appeared to relent after deliberations with the Office of the Speaker and the reported payment of delayed MP pay. However, on November 3, Majority Leader Osei Kyei-Mensah Bonsu said the whole party was now behind the motion. They are joined by the NDC, which filed a motion of no confidence against the finance minister accusing him of mismanagement, conflict of interest, misrepresentation of economic data among others.4. The threat is that without an agreement on the fate of Ofori-Atta and Boahen, however set up and regardless of its merits, MPs will not let the budget pass.

The gap between the party and the government is widening. The president has served two terms and will no longer face the electorate. He said in response to threats of voter exodus, “People make those kinds of threats, they don’t scare me…if it’s an election and you choose to vote for the NDC, it’s your own problem, not my worry because nobody holds your thumb to vote, it’s your job”. Well, that must scare his deputies. Few people imagine that the NPP could win the presidency in 2024, regardless of the eventual candidate. But of the 275 constituencies, more than 100 were decided by a margin of 10% or less – they are spread across all but two of the 16 regions. Just under half of the marginal seats are held by the NPP. MPs know the mood in the country5. In the current scenario, the question is not whether or not the NPP will lose power and its slim majority in 2024. But whether the party will see its representation gutted, to a historic extent.


Clarity and alignment of strategy and messaging is still an unmet ambition for government. To achieve this, he would have to make plans and statements assuming that currently his audience (a) has no faith, in fact their bias is to disbelieve, and (b) they are angry. An IMF program is a necessary but not sufficient condition to reverse this state of affairs. This would likely eliminate the apparent contradictions in the economic strategy described above. And then on both sides of the publication of a letter of intent from the IMF, one must look for opportunities to gain confidence.

For example, changes in the management team. Currently, the most important appointees with (to varying degrees) influence over the design and implementation of economic policy are Ofori-Atta and Boahen in the Ministry of Finance, Nana Bediatuo Asante in the Office of the Presidency, the Vice President Mahamadu Bawumia, Majority Leader and Minister of Parliamentary Affairs Osei Kyei Mensah Bonsu and Godred Dame at the Ministry of Justice. Politics is a game of snakes and ladders, they all know that. The national interest and the president’s legacy are at stake.

Akufo-Addo could seek to attract technocratic expertise – the constitution only requires that most cabinet ministers be drawn from parliament, i.e. not all of them need to be MPs. Although theoretically the president could reach the other side of the aisle, it is difficult to convince opposition politicians to step in and share responsibility for the next two years of economic adjustment. The costs for them are clear, the loot, less. And even for the president and his NPP, such concord with their eternal adversaries is hard to imagine.


1. 09 November.

2. if you include nominally independent Andrew Asiamah Amoako

3. New figures: the political algebra of Ghana

4. Adogla-Bessa, D. (2022, October 26). A minority tabled a motion of censure against the Minister of Finance. Citinewsroom

5. 6 times senior NPP officials were booed publicly (2022, November 7). GhanaWeb

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