Today in History: Going to IMF will not solve a lot of our problems - Analyst

On June 17, 2022, Chief Executive Officer of C_Nergy Ghana, Michael Cobblah, stated that going to the International Monetary Fund for financial assistance was not the solution to Ghana’s economic challenges.

He said government needs to institute homegrown solutions to sustain the economy instead of running to the International Monetary Fund for a financial bailout.

Read the full story originally published on June 17, 2022 by www.ghanaweb.com.

The Chief Executive Officer of C_Nergy Ghana, Michael Cobblah, has stated that going to the International Monetary Fund is not the solution to Ghana’s economic challenges.

Micheal Cobblah noted that where Ghana currently is, does not require an IMF program, instead homegrown solutions need to be adopted for the sustainability of the economy.

He also noted that successive governments have not been able to sustain IMF’s solutions for the economy.

Speaking on JoyBusiness, he said, “The problem in the past, going back to IMF, is the fact that you go to IMF you’re restricted in terms of your borrowing, you have policy credibility, I do not think that that is where we are today.

“I remember when my good friend said when we wanted to go to IMF we came up with a policy, homegrown policy, homegrown solutions, I don’t think that the IMF came up with something quite different from what we were prescribing for ourselves except that we had thrown so much mud at the system that nobody believed what we were saying and nobody was hearing us internally.

“Where we are today, I do not believe that investors are crying out loud and saying that we need to have policy credibility. If the investors want to see the hard facts, we need to carry the investors along to know what we are doing.”

He wants government to cut down its spending and implement tough fiscal policies that will address the country’s debt challenges.

“On the fiscal side are we really cutting down expenditure as we are expected to cut? And mind you in any situation, any governor’s headache is being able to balance growth and inflation, and we’re not in ordinary times.

“I mean inflation is all over the place, the Covid situation, the Ukraine war, Russian war has brought with it difficulties across the world. Question is that how do we put in measures to ameliorate this for our citizenry to make the situation a bit bearable for our citizens? Can we cut down expenditure? Can we cut down some of the things that we are doing, the growth areas that we are looking at and make sure that people are a bit more comfortable?

“Because this situation is a very dire situation, and as much as you’d run to the IMF, the IMF will come out with its restrictions in terms of borrowing, in terms of employment cuts, and it’s really not going to solve a lot of our problems. Question is can we look internally and be disciplined enough to cut out the areas that we are wasting and to be able to save enough to be able to give the investors the confidence that we have?” he said.

Cobblah also believes that the revenue that the country may get from the IMF will not be enough to solve the country’s monetary challenges.

“If we run to the IMF the maximum, we’re getting is about 400million dollars, half a million dollars, but the hole is much much bigger than that. And we need to demonstrate with hard figures, with cashflows showing that we can really come out of this by cutting own the expenditure that we say we’re going to cut and carrying out showing that the hard numbers in terms of what we really are doing substantially to turn the situation around. I personally don’t believe that the IMF is the solution.

“Like Prof has said, we’ve run there 17 times and we’ve not been able to sustain what was expected of us, going there 18 times will not make any difference,” he said.