Confusion Over IMF Bail-Out
Mona Helen Quartey
The John Dramani Mahama administration has been mired in confusion over whether to opt for an International Monetary Fund (IMF) bailout to salvage the rapidly deteriorating Ghanaian economy or not, DAILY GUIDE has gathered.
Yesterday, the President and his team of economic advisors, including New Patriotic Party (NPP) founding member, Kwame Pianim, met at the Peduase Lodge near Aburi in the Eastern Region, to brainstorm on the way forward.
Senior government officials in recent past have been churning out conflicting accounts about the government’s bailout plan with the IMF, even though the current administration made it clear at the beginning of the year that it was considering an IMF bailout.
Finance and Economic Planning Minister Seth Terkper, had argued for a bailout as a measure to shore up the fast depreciating Ghana cedi and restore some amount of confidence in the economy.
However, earlier this week, a Deputy Minister of Finance, Mona Helen Quartey and Senior Economic Advisor to the President, Dr. Nii Moi Thompson, challenged the planned bailout, saying the government was not making any financial considerations from IMF.
Kwame Pianim, Kwesi Botchwey and President Mahama
Ms. Quartey told international newswire, Bloomberg, ‘We’re not considering an IMF loan at this time,’ while Dr. Nii Moi Thompson told Joy FM yesterday that if there was a plan to seek the IMF’s help to rescue the economy, it would not be financial help but ‘technical expertise’.
‘there’s more leveraging for their technical expertise and so that’s what we are looking atall options are on the table,’ he stated.
President Mahama is currently locked up in a crucial meeting with economic brains at the Presidential Lodge. According to Presidential Spokesperson Ben Dotsei Malor, the experts are critically ‘examining options’ to take the country out of its economic quagmire.
The President chaired the meeting which was under the aegis of the Presidential Advisory Committee on the economy.
Some other people at the meeting dialoguing on economic solutions for Ghana were former Finance Minister, Dr. Kwesi Botchwey and Governor of the Bank of Ghana Dr. Kofi Wampah.
Ben Dotsei Marlor told Joy FM the committee members were busily ‘examining options’ available to them as they seek short-term solutions to bring the economy back on track.
Apparently, the IMF bailout would be coming with stiff conditions for the Mahama administration to downsize its public workforce.
Organised labour last week organised nationwide massive protests against the forlorn economic situation and therefore economic experts claim the environment was not conducive to swallow the IMF bitter pill of job cuts.
‘A lot of the issues the IMF may raise [should government opt for assistance] are issues that we are working on any way,’ Dr. Nii Moi Thompson remarked in an attempt to pre-empt the difficulties that will confront the government if it decides to downsize.
The Ghana Education Service alone, according to Dr. Thompson, has over 40,000 drivers on its payroll, ‘That’s simply not something that we can sustain in the future,’ he stressed.
There are indications that the Government may be opting for a $1.5 billion Eurobond from the international capital market in the short-term, despite the downgrading of Ghana’s credit worthiness, instead of waiting for a rigid regime from the IMF.
However, according to reliable sources, the government would later approach the IMF for a financial bailout after it had secured the Eurobond in a move seen as a smart one.
Experts have warned the government to be cautious about being too confident that the Eurobond would solve much of its problems. Economists say whatever prospects the Eurobond presents, it would only serve to temporarily mitigate the raging economic difficulties.
Ghana is currently gripped by the stark reality of a possible economic meltdown, given the government’s inability to mobilise enough revenue, coupled with the fact that it has to contend with a local currency that is fast devaluing against major foreign currencies and an extremely high cost of living for Ghanaians.
By Raphael Ofori-Adeniran
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