He said the “going and coming” to the IMF depleted people’s faith in the country’s democracy and it also created instability.
Mahama stated in an interview on VOA’s Straight Talk Africa programme that the return to IMF in present time has been occasioned by twin factors namely excessive borrowing and expenditure outweighing revenue.
He opined that the onus now lies on the country to particularly bring debt to sustainable levels and also achieve fiscal consolidation.
“This government has twin problems. One is macroeconomic instability because expenditures far exceed revenues. Revenues are not performing properly. The second thing is also that they went on a borrowing spree and they have pushed our debts to levels that are unsustainable.
“Just recently the World Bank came and said we had almost 104 of debt to GDP and so we have twin problems. One to achieve fiscal consolidation and two, to bring debts back to sustainable levels. So that is what they are faced with,” he submitted.
Mahama intimated that issues such as the fight against corruption and the strengthening of state-owned institutions ought to be addressed in order for the economy to thrive.
He mentioned that the current return to the IMF to achieve debt sustainability and policy credibility should mark the start of governments prudently running the economy.
“The economy is situated in an environment. It does not exist in isolation and so there are somethings that need to be done to create an environment for the economy to thrive. Some of them are governance issues, strengthening state-owned institutions, the fight against corruption and so many other things that create the environment for the economy to thrive.
“I think that when we go into this programme and we bring debts back to sustainable levels and we are able to get the bridging facility in other to achieve policy credibility so that investors again feel confident that they can bring back their money into Ghana, then we must start from there and maintain that prudence. This should be the last time we go to the IMF because going and coming, it creates a certain instability in the whole system and it also reduces the faith that people have in our democracy,” Mahama said.
Ghana initiated contact with the IMF in July after the economy experienced a downturn. The move was occasioned by downgrades of the economy by rating agencies such as Fitch, Standard and Poor and Moody’s which prevented the country from accessing the international capital market.
Ghana with its move is looking for a US$3 billion programme over a 3-year period. The government has expressed confidence that the programme will help return the country onto a path of progress.
