Terkper rejects IMF pessimism

Minister of Finance Seth Terkper says pessimism about the country’s recently announced three-year programme with the International Monetary Fund (IMF) is premature.

Mr. Terkper, responding to the economic policy think-tank Institute for Fiscal Studies which had raised questions about government’s ability to meet IMF conditionalities, said the organisation’s stance is unfounded.

The Finance Minister in an interaction with the press on Tuesday said: “I don’t think that this pessimism helps the country. We even heard views that the IMF board will not approve a programme for the country. I think we should take a cue and be more optimistic.

“The country is not putting its 100 percent faith in the IMF tranches; they are essential for smoothening and managing the country’s external balance…we would not put the fate of the economy only in the IMF tranches. “This is not the first time that Ghana has gone into an IMF programme and failed; we have at various times asked for waivers and they were granted,” he said.

The IMF Executive Board last week approved a three-year arrangement under the Extended Credit Facility (ECF) for Ghana in an amount equivalent to SDR 664.20 million (180 percent of quota or about US$918million) in support of the country’s medium-term economic reform programme.

According to Mr. Terkper; “Government wouldn’t go into an IMF programme and set the country up for failure. That can never be the tenor of government’s policy…Yes, the IMF staff point to some difficulties, but I think the situation facing the country now is not worse than what we confronted two years ago when we had cocoa, gold prices tumbling rapidly… as well as halting of gas supply from the West Africa Gas Pipeline”.

The Finance Minister maintained that there are better prospects facing the country. ‘If you look at all these prospects, such as the coming on stream of the Sankofa and TEN Oil Fields, one can only say the IFS may be entitled to its views but we can only wait and see,” he said.

The new ECF-supported programme, anchored on Ghana’s Shared Growth and Development Agenda, aims at strengthening reforms to restore macroeconomic stability and sustain higher growth.

The main objectives of the programme are to achieve a sizeable and front-loaded fiscal adjustment while protecting priority spending, strengthen monetary policy by eliminating fiscal dominance, rebuild external buffers, and safeguard financial sector stability.