Ghana facing economic distress
President Akufo-Addo to address nation on IMF engagements
Former Chairman of Parliament’s Finance Committee, Dr Mark Assibey-Yeboah has opined that Ghana’s economy performs better under an International Monetary Fund programme.
He argues that under the current economic challenges, loans contracted under the Fund will attract zero interest.
Speaking in an interview on Accra-based Citi TV on July 5, the former lawmaker for New Juaben South explained that it was more prudent for Ghana to borrow from the Fund than from the open market.
“I argue that when the IMF are in town, we get things done right. If you go back to the programme, we had under Atta Mills 2009 – 2012…fantastic. the macro indices at the time, the best we have seen in a long time between 2009 and 2012. The moment the Fund left in 2012, everything went berserk. If I were Finance Minister I will park the economy at IMF,” Dr. Mark Assibey-Yeboah said.
“The IMF is like the Bank of Ghana to all countries…you fall on them for assistance. We borrow on a weekly basis. This Friday, there will be an auction, we will borrow about GH¢1 billion.
“Last week we borrowed. Every Friday we go for auction at the Bank of Ghana, we borrow money. We borrow at 27% [interest rate]. If you go to the Fund and they give you $1 billion, it will be interest-free…0%. They will give you a moratorium and give us 25 years to repay,” he explained further.
Meanwhile, officials from the International Monetary Fund arrived in Ghana on Tuesday, July 5, 2022, to commence negotiations with the government of Ghana starting July 6.
The negotiations will border on the modalities for a package to support Ghana’s economy.
The team, will however be led by Carlo Sdralevich, who is a renowned economist and negotiator at the Fund. Prior to their arrival, the IMF Mission Chief in a statement noted the Fund's readiness to assist Ghana to restore macroeconomic stability, safeguarding debt sustainability, among others.
Background
President Nana Addo Dankwa Akufo-Addo on July 1, authorized the Finance Minister, Ken Ofori-Atta, to hold formal talks with the Bretton Woods institution.
This comes after Ghana has in recent months been faced with rather difficult economic challenges which have left almost all economic indicators in distress.
The country, in spite of some gains made during the COVID-19 pandemic, is facing a huge debt burden, revenue generation constraints and other factors which have placed the economy in a dire situation.
Recent developments on the globe, coupled with supply chain disruptions, the fallout from the pandemic and Russia’s invasion of Ukraine have made the situation even direr.
Government of Ghana is however targeting beteen US$1.5 and US$3 billion from the International Monetary Fund under an economic support programme.
This was contained in a document released by the Ministry of Finance spelling out some details of the government's engagement with officials from the Bretton Woods institution in July.
The ministry explained that it seeks to secure the fund under a recently introduced innovative blended programme from the IMF dubbed; High Combined Credit Exposure (HCCE) policy.
Dr. Mark Assibey-Yeboah, former Chairman of Parliament's Finance Committee