IMF deal was a waste of time - Assibey-Yeboah

Dr. Mark Assibey-Yeboah, the Chairman of the Finance Committee has rebuked the NDC government for failing to meet International Monetary Fund (IMF) targets aimed at ensuring macroeconomic stability.

Contributing to a debate on the President's State of the Nation Address in Parliament, the MP for New Juaben South, Dr. Mark Assibey-Yeboah enumerated missed targets which he says defeats the rationale behind going for the US$918 million bail-out in July 2014.

The IMF Executive Board in April 2015 approved a US$918 million Extended Credit Facility to Ghana to support a reform programme aimed at faster growth and job creation while protecting social spending.

The previous government, according to Dr. Assibey-Yeboah, had aimed to restore debt sustainability, to restore macro-stability, to return to high growth and job creation as well but failed to achieve the set objectives.

Prior to Ghana joining the programme, the debt to GDP ratio was 70.2 percent in 2014 and subsequently rose to 74 percent at the end of 2016, Dr Assibey maintained; “So you are in a programme that seeks to restore debt sustainability, you have moved from 70 percent before you joined the programme to 74 percent as of now.”

The programme was also to restore macro-stability but before the country entered the deal, the fiscal deficit in 2012 was 11.5 percent, 10.1 percent in 2013 and 10.2 percent in 2014, three continuous years of double digits deficit, which he described as unprecedented in the country.

He indicated that they had expected the previous government to do around 5.3 percent for this year but reports say the deficit is about 9 percent.

"So why did we enter the IMF programme to start with? It has been a complete waste of time", the New Juaben South MP asked on the floor of Parliament.

“In 51 years of Ghana’s existence, the debt was Gh¢9.5 billion, now you have bequeathed this country in 8 years, you have moved this debt from Gh¢9.5 billion to Gh¢122 billion.”

The IMF mission concluded its visit to Ghana two weeks ago and their team leader, Joël Toujas-Bernaté said in his statement that at the end of the visit that;

“Ghana’s economy continues to face challenges. While the estimated economic growth of 3.6% in 2016 exceeded our target of 3.3%, the decline in inflation has been slower than expected. The current account deficit narrowed to 6 ½ percent of GDP, contributing to a small buildup of foreign exchange reserves.

“In 2016, the overall fiscal deficit (on a cash basis) deteriorated to an estimated 9 percent of GDP, instead of declining to 5¼ percent of GDP as envisaged under the IMF-supported program. The large deviation was mainly due to poor oil and non-oil revenue performance and large expenditure overruns. As a result, the government debt-to GDP ratio increased further to close to 74 percent of GDP at end-2016.”