Makola Market, Accra, Ghana Photo: Bengriff/CC
Makola Market, Accra, Ghana Photo: Bengriff/CC

Trade union federation must provide platform for united actions against IMF’s attacks and high cost of living

Peluola Adewale, Democratic Socialist Movement (CWI Nigeria)

Ghana is in a serious debt crisis. The country defaulted on its external debts in December 2022, shortly after it had imposed a restructuring programme in line with the dictates of the International Monetary Fund (IMF).

Also, as a condition for a $3 billion IMF loan, it has to restructure its eurobonds and bilateral components of the external debts. This deal makes it the eighteenth time Ghana has gone to the IMF, something which is a bold signpost of the failure of capitalism in a country once described as Africa’s shining star by the World Bank.

Indeed, the debt crisis is just a pronounced feature of the major economic problems currently afflicting the country. The economic indices are scary and unenviable. Inflation reached a record 54% in December 2022, the highest in 22 years. Ghana was ranked as the country with sub-Saharan Africa’s highest food prices by the World Bank’s 2022 Africa Pulse Report. The report, which was released at the end of October 2022, indicated that food prices have gone up by 122% since January 2022. The fuel price shot up by over 140% in 2022. The Ghanaian cedi lost nearly 52% of its value in 2022 and was ranked the worst-performing out of 148 currencies worldwide.

‘Malevolent forces’

Given the enormity of the crisis, President Nana Akufo-Adodo lamented that he “cannot find an example in history when so many malevolent forces have come together at the same time”. But the “malevolent forces” are not unnatural. They arose from the corrupt system and profit-first nature of capitalism.

Credit rating firms such as Moody’s downgraded Ghana to ‘junk’ status in 2022. As a result, Ghana was unable to raise money on the international market and only had a sanctuary in the domestic debt market, where borrowing costs soared. The interest rate was as high as 32%.

In December 2022, Finance Minister Ken Ofori-Atta revealed that interest payments were consuming between 70% and 100% of government revenues. Other than default-stricken Sri Lanka, that is the worst statistic in the world, according to credit rating agency Fitch.

‘Home-grown solutions’

Grandstanding to keep to its ‘Ghana Beyond Aid’ mantra, the Akufo-Adodo government did not initially openly welcome the IMF option, even when everything indicated that the fiscal crisis was getting worse. The government did not approach the IMF until July 2022. It preferred what the finance minister called ‘home-grown solutions’. But as expected, on the basis of capitalism, especially in a neocolonial economy, the so-called solutions only compounded the problem with measures that made working people and the poor, who were already under crushing cost-of-living pressures, pay more for the crisis.

The ‘solutions’ included a new electronic transaction tax, introduced in April 2022, which was meant to help raise $900 million in much-needed revenue along with spending cuts. However, as of June 2022, the tax, which triggered some protests, had only generated 10% of estimated revenues. The electricity tariff and VAT were also hiked by nearly 60% and 20% respectively.

Indeed, the ‘home-grown solutions’ were like a demonstration to the IMF of the readiness of the Akufo-Adodo government to force the IMF’s bitter pill down the throat of the masses, in order to win its bailout.

The anti-poor IMF programme, a condition to the $3 billion loan, is expected to last for at least the next five years, having targeted bringing the debt level from the current estimated 105% of GDP to 55% by 2028. This will mean a heavy package of tax rises and spending cuts on education and health care, as well as an intensification of neoliberal policies such as currency devaluation. The last such programme which ended in 2019 included a freeze on salaries and the removal of oil subsidies.

While it is correct that both the Covid-19 pandemic and Ukraine war were major contributors to the current economic mess in Ghana, just like many countries, they are not the only ones. The external shocks only compounded the effects of some actions taken by the government in the interest of private profits, but which constituted a dead weight on the economy.

For instance, in 2021 Akufo-Addo’s government provided a $3 billion bailout essentially to private power producers. From August 2017 to December 2018, the government spent more than $2.1 billion on what it called the “banking sector clean-up”. By 2022 the government had also lavished $58 million of public money on the National Cathedral – a $100 million prestige project – conceived in 2018.


However, the working people of Ghana have not just resigned themselves to their fate over the economic hardship without putting up a fightback. In the last year the country has witnessed a series of protests over the cost-of-living crisis, fuel and electricity price hikes, and outrageous taxes including the electronic payment tax.

Public sector workers were also in action. After some unions had been on strike for over a week, the government finally agreed on 15 July to provide a 15% cost-of-living adjustment allowance to all public sector workers effective from 1 July. The government was also forced to exempt pensions from the IMF-dictated domestic debt restructuring programme by the opposition from trade unions, including a threat of a general strike in December.

Unfortunately, the Ghana Trades Union Congress (TUC) has not called a general strike and mass protests that would aggregate all the issues and unite different isolated actions. This would help build a formidable force to defeat many of the anti-poor policies. Workers and activists should call on the TUC to organise such action.

There has also been opposition against the entire IMF deal within trade unions and the working people in general. History has proved that the IMF deal cannot fundamentally resolve the crisis. Yaw Baah, Ghana TUC general secretary, said: “The solution to Ghana’s problems doesn’t lie in Washington. This is a tragic mistake by the government”. By Washington, he meant the IMF and World Bank. What is missing, apart from a centrally organised programme of mass action, is a genuine alternative to the IMF and the building of a mass movement that will drive it.

Socialist alternative

However, the needed alternative cannot be found in any form of ‘home-grown solutions’ built on a capitalist model, something the TUC leadership themselves believe despite the failure of Akufo-Adodo’s ‘Ghana Beyond Aid’.

What is needed is socialist planning, which will make possible the use of human and material resources for the development of the country and the needs of the vast majority. This is the task for working-class people. Though at present there is no widespread socialist consciousness, the continued failure of capitalism in Ghana and globally, and resistance against capitalist attacks, could make workers and youth in search of an alternative reach a socialist conclusion.

By and large, the return to debt crisis as a result of the failure of capitalism is not limited to Ghana. 22 countries in sub-Saharan Africa were rated by the IMF to be in debt distress or at high-risk a debt distress. The figure was up from just eight countries in 2015. The system that makes a continent that is enormously rich in natural resources remain in a perpetual crisis has to be ended. But achieving this requires a socialist revolution together with international working-class solidarity. Building forces for such a revolutionary task not only in Africa but globally is the major objective of the Committee for a Workers’ International (CWI).

This is a shortened version of the article published on