Going for IMF bailout will be another mistake – TUC warns Mahama

Ghana’s Trade Union Congress (TUC) has told President John Mahama not to go for a financial bailout from the International Monetary Fund (IMF).

TUC Secretary General, Kofi Asamoah, told the President directly at the May Day Celebration at the Independence Square in Accra that, bailouts from the IMF in the past are to blame for the country’s current economic woes.

“Your Excellency, times are hard; the prognosis on the economy is not good either, but we must at this point resist the temptation to seek IMF bailout. As we have stated, it is the IMF-sponsored policies that have brought us almost to the brink. No country has developed following the advice of the IMF. Resorting to the IMF for financial support was a mistake we made in the past. We must take responsibility of this mistake and find a solution to our problem.

The Union’s caution comes on the heels of reports that the government intends seeking assistance from the IMF to fix the ailing economy. Rumours of a possible request for a bailout were rife prior to the finance minister’s recent participation in the IMF/World Bank Spring Meetings in Washington.

The country’s local currency – Cedi – has fallen in value by about 20 percent since January 2014. About 70 percent of tax revenue is also used to pay salaries. Both the IMF and the World Bank have blamed the situation for the worsening year on year budget deficit. The Government is also moaning that the situation leaves very little resources to invest in social and economic infrastructure. There are some statutory payments which have still not been honoured by the Government. Also, some contractors who have done different jobs for the state are still being owed.

Financial analyst, John Gatsi, believes Ghana must go for a bailout for short term relief, but the Chairman of the finance Committee, James Klutse Avedzi, argues that home-grown measures being implemented to fix the economy must be allowed to work for at least a year before any consideration is given to the idea of a bailout.