IMF not panacea to Ghana’s economic woes—World Bank, experts

The World Bank and Economic and Finance experts say Ghana do not require an International Monetary Fund (IMF) programme to guarantee a strong economic footing to accelerate its national development.

They said though a programme with the IMF would be helpful in debt management, it would only provide a short-term remedy to the challenges facing the economy, which had been exacerbated by the impact of the COVID-19 pandemic.
The World Bank Country Director, Africa, Pierre Frank Laporte, Economist, Dr Patrick Asuming, and Financial Analyst, Mr Kenneth Thompson said.
In a media engagement on Thursday, Mr Laporte, said, the IMF would help Ghana to renegotiate some of its debts with creditors, guarantee more loan, and give the country an economic framework that would help shore up its reserves.
He, however, noted that: “The country can go forward and do things without the IMF, because what the IMF does is that it gives you a programme of reforms and gives you money that goes to help you in your reserves.”
He added that: “There’s a mixed picture in Ghana, whereby your growth is okay, but your revenues are not strong, and your debt is very high. You can do it without the IMF, but the IMF can always give you something extra to do more.”
In an interview with the Ghana News Agency, Dr Asuming, who is a Senior Lecturer at the University of Ghana Business School (UGBS), said: “The policy credibility part probably is a short-term thing that might help with the short-term market economic management. So let us face it, IMF is not the solution to our problems.”
He added that: “IMF simply comes with austerity; IMF will come with expenditure rationalisation, and it will come with an attempt to raise revenues. IMF, sure is still good for macroeconomic stability in the short term. They never help promote long term development of the economy.”
On the way forward, he said: “We must do the hard things that we have to do; we must cut waste and get the government to spend within its means. We have to ensure that all those free tax that we give to our government officials, we take them off.”
Adding to this, Mr Thompson, who is the Chief Executive Officer (CEO) of Dalex Finance Limited, said: “We need to demystify this IMF business. Ghana is in a tight situation. Let us not go to the IMF because their conditions may not help, so government must look for ways to increase domestic revenue.”
Mr Thompson, in a media engagement, recommended prudent measures in collecting property tax with all seriousness.
He said: “Let’s set up courts that collect the tax 24/7, give bailiffs more powers to collect it, and set targets for the Ghana Revenue Authority (GRA) and that’s how we can raise the revenue.”
“In the long term, we need to have a sustainable debt strategy. That is what the markets need. The markets will downgrade you because they think there is a possibility for you to default. But if you have a strategy that shows that your debt is sustainable, then that is fine.  That is the most important thing in addition to a strategy that is credible,” he added.
Ghana last exited an IMF programme in 2019 after it went to the international financial institution for a $918 million loan in 2015 to help stabilise the economy.
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