IMF bailout: We will come out stronger – Bawumia

Vice-President, Dr. Mahamudu Bawumia, is optimistic that Ghana will, this time around, emerge stronger after going to the International Monetary Fund (IMF) for support.

Ghana has already begun discussions with the IMF to provide balance-of-payments support as part of a broader effort to quicken Ghana’s build-back in the face of challenges induced by the COVID-19 pandemic and, recently, the Russia-Ukraine crises.

Speaking at the official launch of the Accra Business School’s IT Programmes on Thursday, 14 July 2022, Dr. Bawumia said it will take a lot of hard work and difficult decisions for Ghana to bounce back.

“With enhanced fiscal discipline and structural reforms to restore debt sustainability and growth, we should emerge stronger than we have with the previous 17 IMF programs,” he said.

“But it will take hard work and difficult decisions. With great pride and personal pleasure, it is good that we are all part of this launch of three new programmes by the Accra Business School in collaboration with the South East Technical University”.

“It’s a day when the neglect of many decades comes to an eventual end. It’s a beginning to lay the foundations of strengthened institutions to take up the challenges of time with an able and apt workforce. It’s a day when a new beginning is being made by forging a common alliance between the government and academic leaderships to protect, preserve and promote above all, democracy via digitalisation.”

Dr Bawumia stressed that the twin external factors of COVID-19 and the war in Ukraine, which he said, has also led many countries to the IMF for support, following the rising cost of living and inability to sustain debt levels, has also exposed the need for Ghana to put in place measures to be more fiscal-discipline.

"The major lesson of the last two years is that we have to be more self-reliant as a country," Dr Bawumia said.

"It is important that we make decisions that will inure to the benefit of the country regardless of whether we are going to the IMF for a program or not."

"The immediate task is to restore fiscal and debt sustainability – through revenue and expenditure measures and structural reforms.

Non-concessional borrowing should be curtailed to enhance debt sustainability," the Vice-President added.

Dr Bawumia also observed that successive governments have failed to achieve long-term economic stability after each of the past 17 IMF programmes due to the lack of systems to ensure sustainable stability, hence the government's focus on ensuring such systems are put in place.

"I should note that Ghana has gone to the IMF for a program 17 times since independence and after each IMF program, the underlying system and structure of the economy remained the same," Dr Bawumia said.

"It is important to note that the focus of economic management by successive governments since independence in Ghana has been on crisis management as a result of factors such as the collapse in commodity prices, increase in oil prices, debt unsustainability, political instability, macroeconomic instability, etc. Governments, have by and large, not focused on building systems and institutions that underpin economic activities in a modern economy."

These modern systems for sustainable economic development, Dr Bawumia said, are: "the systems that will reduce bribery and corruption, the systems that will make the delivery of public services efficient, the systems that will enhance domestic revenue mobilization, and the systems that will make life generally easier for Ghanaians."

The Vice President noted that since 2017, the government has been focused on building these systems, which include a biometric national identification card, a functioning digital property address system and an aggressive financial inclusion programme, digitisation of government services and many others, which he said, are enhancing services and making access easier, reducing corruption and strengthening domestic revenue mobilisation.

He, therefore, called for a renewed focus on building and strengthening these systems, alongside enhanced fiscal discipline, to ensure sustainable economic recovery after the latest, 17th IMF programme.