IMF bailout: We must not jubilate because painful adjustments are coming - Bokpin

Economist at the University of Ghana Business School, Professor Godfred Bokpin has stated that the approved $3 billion loan facility from the International Monetary Fund is not one to be overly excited about.

According to him, the goal of the programme, which is to restore macroeconomic stability will come with some painful adjustments that will leave the vulnerable worse off.

“I don’t think that we should jubilate over this because there are painful adjustments ahead of us in order to restore macroeconomic stability. Whether we like it or not, restoring macro stability is going to come at a cost. Unfortunately, the adjustment cost in the programme will not be evenly distributed. The adverse distributional effect will impact the vulnerable more than those who actually inflicted this pain on us.

“If you look at the IMF programme, typically, the fiscal consolidation mix takes the form of revenue enhancement and expenditure restraint, but the IMF lent its support toward government’s approach such that the problem is more revenue than expenditure or corruption or efficiency and that is problematic,” he was quoted by citinewsroom.com.

Prof. Bokpin chastised government for causing the country’s current economic problems adding that Ghana’s problem has not been because of low revenue therefore increasing the tax-to-GDP only presents citizens with harsher conditions.

Prof Bokpin intimated that, “You are looking at scaling up your tax-to-GDP ratio to up to 18.2 percent by the next two or three years and that is a lot of sacrifice on the part of businesses and households.

And it cannot be solely that the reason Ghana is facing this crisis is because of low revenue because that is not true. If we were efficient with the little, we were able to generate, and we were able to deal with corruption, this is not where this country would have been.”

SSD/MA