'Ghana may have no choice than to go the IMF in an ambulance' – Prof. Bokpin

Ghana’s debt situation could worsen by the end of September, Prof. Bokpin

Bank of Ghana must make sure foreign reserves are not depleted

Cedi depreciation, only thing stopping us from going to the IMF

Finance Lecturer at the University of Ghana Business School (UGBS), Professor Godfred Alufar Bokpin says if Ghana’s foreign reserves are not properly guarded, Ghana may be forced to go the IMF as a sick patient.

He laments the country’s debt stock adding that the depreciation of the cedi is the only factor hindering the country from going to the IMF.

He was speaking on JoyNews’ PM Express, on March 8,2022.

“If you look at the template that Ghana sent to the IMF in 1965 under the watch of Dr Kwame Nkrumah which is a reflection of what has been happening over the years. There’s only one thing left which is keeping us from going to the IMF right now and that has to do with the depreciation of the cedi.”

“If Bank of Ghana decides to fight that, burn through our international reserves and once the international reserves deplete to a certain level, you have no choice than to go the IMF in an ambulance,” he explained.

Prof. Bokpin also alluded to the fact that using the Monetary policy to stabilize the Cedi may not be a sustainable measure, adding that if proper interventions are not implemented, Ghana’s debt situation could worsen by the end of September.

“The effect of that [Bank of Ghana burning its foreign reserves] is beginning to show on the cedi and what will happen now is that everybody is waiting to see to what extent can Bank of Ghana defends the cedi with their international reserves.”

“This was what we did in 2014 and somewhere in the middle of 2014, our net international reserves could only cover like 2 months of imports. When it gets to that point, you will have to make a call to the IMF,” he added.

He stated that the local currency will continue to depreciate due to the lack of predictability of the 2022 Budget.