By Vivienne Russell | 5 August 2014

Ghana’s decision to seek emergency financial aid from the International Monetary Fund is not an indictment of its domestic policies and measures are in place to bring the country’s troubled public finances back under control, President John Dramani Mahama has claimed.

The West African country is to open up talks with the IMF in a bid for greater economic stability and to help shore up its faltering currency.

Despite Ghana being a major exporter of gold, oil and cocoa, it has struggled to keep down public spending and borrowing and run up large current account and budget deficits. Consequently, the Ghanaian cedi has fallen almost 40% against the US dollar this year, making it one of the world’s weakest currencies.

Explaining the decision to approach the IMF, Mahama said Ghana needed to win back confidence from international financial institutions, investors and capital markets. But he said there would be no significant shifts in domestic policy.

‘We are taking subsidies off fuel and the utilities, streamlining the spiraling public sector wages, we are working to improve revenue collection and efficiency in collecting taxes and also reforming the public financial management system,’ Mahama said.

Speaking at the Africa Ascending summit in Washington DC today, the president also criticised what he characterised as a short-term focus on the state of Ghana’s economy.

‘As much as we have tried to draw attention to Ghana’s potential, there is too much fixation with the short-term narrative; yes there has been a deficit and inflation has gone up but we have put in measures to turn that around,’ he said.

‘Deficits are not turned around just in a year or two… the deficit will be brought under control by 2017.’

An IMF spokesman said the fund ‘stands ready to engage with the Ghanaian authorities and develop with them a fund-supported programme to tackle Ghana’s fiscal and external imbalances as soon as a formal request is received’.