IMF conditionalities could collapse businesses – GUTA warns

The Ghana Union of Traders’ Association (GUTA) has expressed worry about the International Monetary Fund (IMF) bailout for Ghana due to the conditionalities attached to the deal.

After Ghana’s debt-ridden economy took a nosedive, the government turned to the IMF for a bailout to balance the West African country’s finances.

After ten months of negotiations, Ghana has received an amount of $600 million from the IMF, the first tranche of the $3 billion bailout package.

Despite government’s optimism about a possible turnaround, GUTA thinks otherwise, especially as taxes are soaring than usual.

The President of GUTA, Dr. Joseph Obeng, noted that although they are quite happy about the deal, they are not overly excited, fearing that the conditionalities could collapse businesses if the government fails to put measures in place to deal with them.

“We can say that we are happy that the IMF deal has come through, but we are not overly excited, because of the obvious, the conditionalities and what is not known to us. So we are yet to brace ourselves for any eventuality that the IMF deal brings. It’s not an end in itself, the IMF $600 million that has come means that it’s also going to bring the conditionalities that we have to also contend with,” Dr Obeng said on Citi TV’s Face to Face programme.

He said there were plans for the GUTA leadership to talk with the government on how some mitigating measures can be initiated to deal with the IMF conditionalities.

“Otherwise, businesses will collapse under the IMF programme. And I don’t think that is the reason why the IMF deal was approved,” Dr. Joseph Obeng stated while hoping the IMF deal brings the confidence and credibility that the business community seeks.

“Our businesses are going to be affected positively for now. If you have seen the speculations around the $600 million and all that, it has actually given the Cedi some strength. That’s all that businesses seek, businesses seek stability, and we say that the IMF deal brings confidence and credibility,” he added.

The President of GUTA anticipated that key pillars that hold businesses that took a downturn will resurrect now that the IMF deal is on.

“We are expecting that if the deal has come through, the other indicators that make businesses strive but were broken before the deal will be resurrected. We are talking about the exchange rate, inflation and interest rate,” he envisaged.