Opposition mounts against IMF bailout

The Economy Times has monitored with keen concern the pressure that keeps mounting on the government to consider cancelling its bailout program with the International Monetary Fund (IMF) which will end in 2017.


The opposition to the IMF bailout has argued that, the Fund’s conditionalities have brought a lot of economic hardship onto the ordinary citizens at a time when the global economy has also not been stable.

The outgoing General Secretary of the Trades Union Congress (TUC), Kofi Asamoah,has consistently bemoaned government’s decision to always seek bailout from the International Monetary Fund (IMF) as against home grown solutions.

According to him, Ghana has the requisite trained personnel with the expertise which can solve the country’s problems without imposition of stiffer controls on the country from abroad.

He laments that the weak nature of Ghana’s economy has taken a huge toll on the livelihoods of the people.

Also, some civil society organisations and public sector workers have lashed out at government for accepting what they term “harsh conditions’ which have been imposed on Ghanaians.

Public sector employment in some sectors has been frozen, and spending within budget, even in an election year are some of the conditions the country is having to abide by or face the wrath of the IMF.

The IMF bailout according to Mr Asamoah, has not benefited Ghana in anyway, noting it has rather tightened the grip of an already tough economy. He said government should cancel the agreement and turn to homegrown policies and ideas which are potent enough to save the economy.

“Government introduced the IMF programme in 2015, but these policies are not working. Ghanaians are getting poorer every day under the IMF programme. We, therefore, urge you and your government to abandon the IMF programme.” Mr. Asamoah stressed.

However, Professor Godfred Bokpin, an economist and Head of Finance at the University of Ghana Business School, has said clamour by the Trades Union Congress (TUC) for government to suspend the International Monetary Fund’s US$918million Extended Credit Facility and rather stick to home-grown policies lacks merit.

Ghana signed up for the programme in April 2015 after fiscal challenges triggered large public fiscal deficits.

The country received an initial $144.8 million in April 2015 and a second tranche of $115 million in August. The government is expecting a third tranche of $116million, being part of the $918million credit facility.

However, Professor Bokpin maintains that: “If anybody says: ‘Abandon the programme, let’s go home-grown’ we will say that how does he justify that call? I will say no, because the reasons why we went for the IMF programme were essentially as a result of a twin deficit: current account deficit and then the fiscal deficit that came as a result of the election year excesses of 2012.

“I do agree that some of the IMF programme objectives have not been achieved and the reason is not necessarily because of the programme design, but more because of the unrealistic assumptions underlying the programme for which Ghana ought to blame itself.

“Now when you also read the IMF programme, there is a tacit admission in that programme where Ghana government acknowledged that the home-grown policy actually failed to deliver on its programme objectives.”
Since the beginning of last year, 2015,the government has been severely criticised for turning to the IMF for a bailout programme, which is expected to among other things, improve the economy and strengthen it in the face of the challenges facing it.
Although, the Finance Ministry has come out to clear doubts of government abandoning the IMF bailout program, the debate rages on, with more pressure mounting on government to abandon the programme

Source: Adnan Adams Mohammed

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