Fitch Solutions has maintained that Ghana will reach a staff-level agreement with the International Monetary Fund (IMF) by the first quarter of 2023.
This will mean that the country could secure a programme from the Fund by the end of quarter 1, 2023 or the second quarter of 2023.
Some economists and experts were anticipating that the country could reach a staff-level agreement with the Fund before the end of 2022 to pave way for a programme by the first quarter of 2023.
But in its latest paper on “Division within Ghana’s Ruling Party to Weigh on Political Stability”, the international research firm also said should the Finance Minister, Ken Ofori-Atta, be replaced, negotiations with the IMF would likely remain largely unaffected.
“While Ofori-Atta remained opposed to an IMF bailout – we believe that he would take a more accommodative approach towards negotiations with the Fund. As such, we believe that a change of finance minister would most likely not impact the timeline of IMF negations and we would retain our view that a staff-level agreement will be reached in Q123 [quarter 1, 2023]”, it explained.
Government to face additional pressure from frequent protests
Furthermore, it said the government will face additional pressure from more frequent protests and industrial action.
“Worsening living standards amid rising consumer prices – inflation reached 40.4% year-on-year in October 2022, the highest reading since 2001 – and tighter monetary conditions have led to a 72.7% quarter-on-quarter increase in protests and riots across in quarter 3 2022. The country has also seen large industrial action in recent months, including a three-day retail strike in Accra in October ”.
Inflation to remain elevated, weighing on living standards
Fitch Solutions also expects inflation to remain elevated in the months ahead.
“Given that inflation is primarily driven by currency weakness, we expect price growth to remain elevated in the months ahead. Indeed, significant capital and financial account outflows caused by weakening investor sentiment will continue to weigh on the currency”.
“Our view is further informed by the fact that previous periods of significant exchange rate weakness in Ghana all lasted roughly 12-14 months, suggesting that the cedi will continue to depreciate into quarter 1, 2023 (the current sell-off started in January 2022). This will keep inflation high, weighing on living standards and eroding support for the government”.
- West Hills Mall death: Shop manager remanded
- Ablakwa kicks court writ on the ground upon service by bailiff
- Rev Kusi Boateng injuncts Ablakwa from further publications on him
- Growing list of companies ordered by GRA to pay back-taxes
- GOIL attributes drop in diesel price to Gold for Oil barter deal
- Rev Victor Kusi Boateng sues Ablakwa for defamation
- I’ve instructed my lawyers to act on Rev Kusi Boateng’s injunction against me – Ablakwa
- Check out Akufo-Addo’s reaction as Black Sherif performs for him
- Diana Hamilton reveals why she won’t talk about National Cathedral
- Ex-policeman gets death penalty for lawyer’s murder
- Musk found not guilty of fraud over Tesla tweet
- Man shot by police was cleaning out – family
- Number of staff suing Twitter ‘goes up daily’ – lawyer
- Nursing and Midwifery institutes prioritising theory over practical skills – Oncologist
- I started smoking at the age of 11 – Musician OJ Blaq reveals
- Ebenezer Kojo Kum resigns as Chieftaincy Minister
- President Akufo-Addo accepts Chieftaincy Minister’s resignation
- Livestream: One-on-one with Seth Terkper on PM Express
- I did national service in Aliu Mahama’s office despite being NDC member – Sam George
- Flora Tissue grants renowned actor Fred Amugi’s 74th birthday wish
- I’m unable to confirm whether 1st gold for oil consignment was paid in cash – Deputy BoG Governor
- I’ll later explain my comment about people who watch movies for long hours – Yaw Dabo
- University of Ghana VC must go – Concerned students demand
- Groundworks underway for construction of modern film studios in Ghana, West Africa – Idris Elba
- GRA withdraws $672m back-tax demand from MTN Group