IMF program extension not govt’s idea – Kwaku Kwarteng

A deputy Finance Minister, Kwaku Kwarteng has disclosed that the decision by the government to allow for an extension of the International Monetary Fund (IMF) programme with Ghana was at the behest of the Bretton Wood Institution.

The IMF, in a statement in August, announced the extension of the programme following a conclusion of an assessment of the fourth review of the Extended Credit Facility by the fund’s board.

The extension contradicts the ruling government’s earlier stance that it would not prolong the programme which was expected to terminate by the end of 2018. It is now set to end in 2019. Ghana entered into an agreement with the International Monetary Fund for economic assistance in 2015 by the then NDC government.

The deal concluded with a funding support of 918 million dollars to be disbursed under eight tranches. Some of the key issues that have dominated the signing of the agreement include the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the Bank of Ghana.

However, speaking Monday on Accra-based Citi FM, Mr. Kwarteng explained that the extension was not the idea of the ruling government.

He said, “When we assumed office we were approached by the IMF that giving the missed target…the fact that the programme has not achieved its target, and it looks like there was no way we could achieve our target…and the programme objectives by the close of 2018, we should extend. That was the suggestion we got from the IMF.”

According to him, when the IMF mooted the idea of extending the programme because it has poorly performed, the government rejected the suggestion.

But what the government did not anticipate, he indicated, was the response the government subsequently received from the IMF that “…if you do not extend, there is no way you are going to achieve the objectives of the programme so we will end the programmed today.”