Economist and Head of Finance at the University of Ghana Business School Professor Godfred Bokpin has said clamours by the Trades Union Congress (TUC) for government to suspend the International Monetary Fund’s $918million Extended Credit Facility and rather stick to home-grown policies lack merit.
“Government introduced the IMF programme in 2015, but these policies are not working. Ghanaians are getting poorer every day under the IMF programme. We, therefore, urge you and your government to abandon the IMF programme,” General Secretary of the TUC Kofi Asamoah said on Wednesday, 10 August at the 10th quadrennial delegates’ congress in Kumasi.
To him, “the economy is still weak and has had very negative effects on our living standards across all socio-economic groups in the country. A significant number of our compatriots are suffering from extreme levels of poverty.” Mr. Asamoah added: “IMF programmes have never worked anywhere and will never work here [Ghana].”
Ghana signed up for the programme in April 2015 after fiscal challenges triggered an over-expenditure of 12 per cent.
The country received an initial $144.8 million in April 2015 and a second tranche of $115 million in August. The government is expecting a third tranche of $116million, being part of the $918million credit facility.
However, Professor Bokpin told Class News in an interview that: “If anybody says that: ‘Abandon the programme, let’s go home-grown!’ we will say that how does he justify that call? I will say no, because the reasons why we went for the IMF programme were essentially as a result of a twin deficit: current account deficit and then the fiscal deficit that came as a result of the election year excesses of 2012.
I do agree that some of the IMF programme objectives have not been achieved and the reason is not necessarily because of the programme design, but more because of the unrealistic assumptions underlying the programme for which Ghana ought to blame itself.
Now when you also read the IMF programme, there is a tacit admission in that programme where Ghana government acknowledged that the home-grown policy actually failed to deliver on its programme objectives.”