The Bolgatanga Central MP, Isaac Adongo, believes the extension of Ghana’s programme with the International Monetary Fund (IMF), is an admission from the Akufo-Addo administration that it needs the guidance of the fund.
He explained on Eyewitness News that the current government now views the IMF programme is giving it more credibility for investors.
President Nana Akufo-Addo, as recently as July 2017, stated that his government would not extend the programme after it ended on December 2018.
But the IMF, upon concluding its fourth review of Ghana’s programme on Wednesday, August 30, 2017, extended the programme by one year and approved a $94.2 million disbursement.
Mr. Adongo was keen to note that this development was at odds with earlier indications from the President and Minister of Finance, who were “very emphatic” that Ghana would be weaning itself beyond 2018.
Per the IMF’s assessment, Ghana showcased a mixed macroeconomic performance, with significant shocks being amplified by policy slippages and resulting external and domestic imbalances.
Growth in 2016 was at low of 3.5 percent, though the IMF said some recovery of growth is expected in 2017-18, owing to an increase in oil production, declining inflation, and lower imbalances with the right policy implementation.
Going on this assessment, Mr. Adongo said, “at the end of the day, we are being confronted with an economic growth module that is reliant on oil growth.”
Investor confidence low
He said the government was only continuing along with the IMF “because they feel that the IMF gives them a better credibility to give confidence to the investors than their own economic management module.”
“So are we now saying that the IMF is the one that we are looking to for policy credibility in order to improve investor confidence in Ghana?”
The MP noted further that, government raised GHc 12 billion in March, but subsequently, the highest they have been able to raise is about GHc 1.5 billion.
“…It tells you that investor confidence is waning and they themselves don’t have a solution that will appeal to the investors and they need a hand holding and the comfort that the IMF gives – the very comfort that was sought by President John Mahama.”
“With all the theories of Dr. Bawumia… they still have to go back and resort to a very poor economic management module of the IMF, which is now the solution of a government that is supposed to be far better than us,” Mr. Adongo said.