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What Dr Duffuor said about government’s reason to engage the IMF

Kwabena Duffuor23112312213123 Dr. Kwabena Duffuor, former Finance Minister

Thu, 7 Jul 2022 Source: www.ghanaweb.com

Ghana should not be facing a huge debt burden – Dr Duffour

Borrowing to build reserves have become a common thing – Former BoG governor

Ghana has adopted self-imposed misery due to economic mismanagement – Kwabena Duffour


Former Bank of Ghana Governor, Dr. Kwabena Duffuor, has described as flawed, government’s intention regarding its decision to formally engage the IMF for financial support.

In a July 1 statement, President Akufo-Addo authorized the Finance Minister [Ken Ofori-Atta] to engage the Bretton Woods institution for an economic programme.

“The engagement with the IMF will seek to provide balance of payment 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,” portions of the statement read.

The former finance minister sharing his view on the decision said issues facing the country predate the coronavirus pandemic and the Russia-Ukraine war as indicated by government on numerous occasions.

“This is not the first, nor the second, but rather the eighteenth time that Ghana is going to the IMF for a bailout—and that number alone speaks to much larger structural barriers in the management of the economy and, by extension, the Ghanaian society, which have made the balance of payments a persistent source of crisis given our failure to address the underlying causes,” Dr Duffuor wrote.

He bemoaned the situation where Ghana has been saddled with huge debt although the country boasts of rich natural resources that could significantly turn around fortunes.

“As a nation, we should not be in debt, for God has amply blessed us with natural riches and resources. But as these have been mismanaged, they do not benefit Ghanaians but rather the external forces who control them,” he indicated.

Touching on the country’s reserves which have been depleting for some time, the former central bank governor lamented the rate at which borrowing to build reserves have become a common thing.

“For decades, we have been borrowing to build our reserves because of the situation where key resources such as gold, minerals and petroleum are not in the hands of Ghanaians, giving foreigners control over the proceeds from the export of these resources and undermining our ability to generate adequate revenue for development and to accumulate ample reserves to offset external shocks,” he opined.

“We then turn to foreigners, through borrowing, to solve what is undoubtedly a self-imposed misery,” Dr. Kwabena Duffour added.

Meanhile, Ghana has in recent months been faced with rather difficult economic challenges which have left almost all economic indicators in distress.

In spite of some gains made during the COVID-19 pandemic, Ghana is facing a huge debt burden, revenue generation constraints and other factors which have placed the economy in a dire situation.

Recent developments on the globe, coupled with supply chain disruptions, the fallout from the pandemic and Russia’s invasion of Ukraine have made the situation even direr.

In view of this, government has commenced engagements with the IMF for an economic support programme. Ghana is however targeting between US$1.5 and US$3 billion from the Fund.

MA/FNOQ

Source: www.ghanaweb.com