Finance and Economics professor at the University of Ghana, Godfred Bokpin, has backed Finance Minister-designate Dr Cassiel Ato Forson’s announcement that the new government may seek additional funding from the International Monetary Fund (IMF).

According to him, the current $3 billion IMF package falls significantly short of addressing Ghana’s substantial economic challenges.

Speaking on Joy FM's Middaynews on Friday, January 10, Professor Bokpin outlined the economic realities necessitating this move.

He pointed out that the initial IMF-supported programme had identified a financing gap of over $15 billion in terms of balance of payments.

Read also: Government could seek more IMF funding, incoming finance minister Ato Forson says

“I think the call is in the right direction...the $3 billion IMF package was largely front-loaded, meaning a sizable portion of it has already been utilised. Similarly, funds from the World Bank and the African Development Bank have also been deployed. This leaves limited fiscal relief for the incoming administration to work with,” he explained.

Professor Bokpin emphasised the need for a comprehensive renegotiation of the current IMF-supported programme to align with the new government’s goals, likening the situation to the biblical analogy of not putting new wine into old wineskins, stressing that a fresh approach is essential to meet the nation’s expectations.

“A new government with a clear electoral mandate cannot be expected to deliver transformative results within the framework of the existing IMF-supported programme. We need an enhanced programme, with extensions that stabilise Ghana’s economy beyond 2026. This would boost investor confidence, attract foreign direct investment, and facilitate long-term economic planning,” he added.

He also noted the challenges facing the government in mobilising funds for the 2024 fiscal year, particularly the need to raise approximately GH₵54 billion. While about 27% of this funding is expected to come from external sources, including the IMF and World Bank, the bulk—GH₵39 billion —must be generated domestically.

However, he added that the government’s reliance on short-term instruments such as Treasury bills due to being priced out of medium- to long-term markets presents challenges, including rising costs and pressure on the yield curve.

“To address these challenges, there’s a pressing need for medium to long-term concessionary funding from development partners. This will not only ease pressure on short-term borrowing but also stabilize interest rates and create fiscal space for the government to operate effectively,” Professor Bokpin said.

He expressed optimism that Dr Ato Forson’s strategic outreach to the IMF and other development partners would provide a lifeline for Ghana’s economic recovery efforts, ultimately creating a more stable foundation for future growth.