Some economists have asked Ghana’s Economic Management Team (EMT) to commit themselves to measures that will solve the structural challenges facing the country even as it prepares to go for another International Monetary Fund (IMF) programme.
Ghana is going for a programme for the second time in seven years with the Bretton Woods Institution after the Government in 2015 went to the IMF to salvage the economy from hardship.
The economists were of the view that going to the IMF would not end Ghana’s economic woes because the measures that would be agreed upon by the Government and the international financial institution would be a short-term measure.
They insisted that Ghana’s economic woes would not end any time soon even with an IMF programme if the structural challenges were not addressed with homegrown policies.
The structural challenges include balance of payment difficulties, being a highly import-dependent economy, depending more on indirect taxes and low revenue generation.
In an interview with the Ghana News Agency, Dr Patrick Asuming, a Senior Lecturer at the Department of Economics, University of Ghana, said that the structural challenges that had persistently inflicted the Ghanaian economy had not been resolved and that the target of the IMF programme would not fix those issues.
He added that: “So, even if we go for an IMF programme and follow the prescriptions, and those structural problems are not resolved, we’ll ultimately return to the same problem.”
Dr Asuming encouraged the Government to ensure that it ended the importation of goods that could be produced locally, while diversifying its export base, and providing more support to industry.
This should be done by boosting agriculture production and adding value to produce by coordinating the Planting for Food and Jobs (PFJ) and One District-One Factory (1D1F) programmes.
The economist added that: “We must ensure that there’s more efficiency in public expenditure and broaden the tax net. The tax Exemptions Bill has been in the budget for more than three years, yet it’s not been passed and that’s also a challenge that needs to be fixed.”
Speaking on a local media station on Saturday, Professor Charles Godfred Ackah, Associate Professor at the Institute of Statistical, Social and Economic Research (ISSER), said: “The problem that Ghana has is a structural problem. The reason for going to IMF 16 times has not been sustainable because they just come to give you temporary short-term steroids.”
Prof Ackah urged the Government to resort to home-grown solutions and ensure that it was committed to implementing such programmes fully.
The issue of Ghana going to the IMF after it exited the one in 2015, which ended about four years ago started from the beginning of the year as inflationary pressures continued for surge.
Additionally, there has been a continuous rise in fuel prices with its associated hike in prices of goods and services, depreciation of the Cedi, as well as exchange rate challenges.
Commenting on this, the World Bank Country Director, Africa, Mr Laporte, said the IMF would help Ghana to renegotiate some of its debts with creditors, guarantee more loans, and give the country an economic framework that would help shore up its reserves.
He, however, noted that: “The country can go forward and do things without the IMF, because what the IMF does is that, it gives you a programme of reforms and gives you money that goes to help you in your reserves.”
The Government had insisted that it would not go the IMF for a bailout programme because the consequences were dire, noting that it had the ability to revive and transform the economy.
The IMF had said that the Ghanaian economy, “was hit hard by the COVID-19 pandemic,” as its growth slowed to 0.4 percent in 2020 from 6.5 percent in 2019.
Mr John Kumah, a Deputy Minister of Finance, explained that the Government’s decision to go for an IMF programme at this time was to help the country to come out from the economic challenges faster.
“Our objective as government is to restore confidence in the economy and rebound it from the difficulty, from the challenges, not only in Ghana but almost all economies around the world.
“We believe that where we stand now, an IMF intervention will help us come out quicker than we could. We hope that it will benefit the country,” he said on a local media station.