Ken Ofori-Atta
Ghana’s Finance Minister, Ken Ofori-Atta, is one of the three persons that are to speak at this year’s Spring Meetings of the World Bank and the International Monetary Fund.
Several finance ministers and dignitaries have in the past attended the meetings usually held in Washington DC.
But due to the coronavirus pandemic, only Mr Ofori-Atta, President of the World Bank Group, David R. Malpass and Managing Director of the IMF, Kristalina Georgieva, are speakers at the summit which may be virtual.
In an earlier article, Mr Ofori-Atta had observed the sharp impact of Covid-19 on the world especially the economies of Africa.
“Economic activity has been massively disrupted; hotels are closing, industry is tottering, airlines are grounded, and our toast-of-the-region airport lies asleep,” he lamented.
He added that “The Bank of Ghana cut rates by 150 basis points and reduced the reserve requirements by 2 per cent, enabling banks to increase their lending to the private sector by some $500m — a good effort, but an underwhelming response to what should be done. I need answers.”
A U-shaped recovery is touted, but ours will likely be a steep drop, then a two- to three-year downward slide before a recovery; a trapezoid-shaped recovery!, he said.
“Back to completing our schedule for the day. [Bank of Ghana] governor [Ernest] Addison and I finish Ghana’s application for the IMF’s rapid credit facility.”
“However, Ghana and Africa desperately need fresh capital. We will work with the World Bank for a renewed approach. (I wonder what past bank heads such as [Robert] McNamara and [James] Wolfensohn would have been thinking at this time.)”
“We are interrupted by a call. One of our major partners in the energy sector from Europe has triggered a letter of credit facility for $200m.”
“I am outraged at such callousness. I am reminded of the parable in Matthew where a man’s debt is forgiven, but he then finds the fellow servant who owes him and has him thrown in jail. I am now even more convinced that the African finance ministers’ proposal for a debt standstill and issuance and/or mobilisation of special drawing rights should be extended for two years and not be limited to low-income countries only.”
“So, what is the world coming to? Extraordinary times, sobering times.
Ghana, at the last count, had 636 cases and eight deaths. Analysis by the University of Ghana’s Noguchi Memorial Institute for Medical Research indicates that about four-fifths of the first 300 cases were direct imports; the virus’s genetic sequencing shows its origins are from Wuhan through Norway, the UK, Saudi Arabia, Hungary and India.”
“What does an African finance minister do now? How can we restore 10-15 per cent of GDP over a two- to three-year period? This is not a passing blizzard, as a friend said; more like a long winter, even a mini ice age. But there are some structural elements that need fixing; our health sector, digitalisation of the continent to formalise our economies; and Africa’s debt — the most controversial element and the topic of much discussion. Africa’s external debt stock is more than $700bn. Africa needs to pay $44bn to service our debt this year.”
By Melvin Tarlue