‘The more broken an economy, the longer the IMF negotiations’ – Bright Simons

Gov’t took too long to go to the IMF, Simons

Zambia waited for 5 years for an IMF programme, Simons

Akufo-Addo orders Ofori-Atta to go to IMF

Vice President of IMANI Africa, Bright Simons, has suggested that the government’s decision to go into an IMF programme will not have any immediate impact on the current hardships Ghanaians are facing.

According to him, the government waited too long to go to the IMF, a situation which has worsened the economy.

In a series of tweets shared on July 1, 2022, Simons indicated that because Ghana’s economic situation is far worse now, it will take a longer time for the government to get a programme with the IMF.

“Ghana waited too long to go to the IMF. IMF doesn't like basket cases. Ghana stubbornly refused to sign on to the DSSI. IMF will insist. It will take weeks to get an IMF staff agrmt. Then the IMF Board has to agree. So, this is NOT a short-term option.

“The more broken an economy, the longer the IMF negotiations. Argentina's latest deal has been under discussion for 2 yrs now. Zambia's for ~5yrs. A Staff Agreement requires Ghana to accept facts it keeps resisting. Ghana will have to sign on to DSSI, So, (it will take) months (for Ghana to Get an IMF programme),” portions of the tweet read.

The IMANI vice president added that, for the meantime, the government should reduce its borrowing drastically and also put in measures to cut down its expenditure.

Simons made these remarks after President Nana Addo Dankwa Akufo-Addo ordered the Minister of Finance, Ken Ofori-Atta, to commence official engagements with the International Monetary Fund (IMF).

In a statement issued by the Minister of Information, Kojo Oppong Nkrumah on Friday, July 1, 2022,the finance minister was instructed by the president to seek IMF’s support for an economic programme put together by the government of Ghana.

View Simon's post below:

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7. The more broken an economy the longer the IMF negotiations.

8. Argentina's latest deal has been under discussion for 2 yrs now.

9. Zambia's for ~5yrs.

10. A Staff Agreement requires Ghana to accept facts it keeps resisting

11. Ghana will have to sign on to DSSI

12. So months.

— Bright Simons (@BBSimons) July 1, 2022

17. Whilst the IMF announcement may have prevented another rating downgrade in the near-term, any prolonged delay in securing an agreement may actually trigger a downgrade.

18. The fiscal situation is such that unless the deal leads to a debt restructuring, investors won't bite.

— Bright Simons (@BBSimons) July 1, 2022