Posted: Tuesday 12th August 2014 at 14:23 pm

IMF Bailout Is Hurting – Arthur Kennedy


Dr. Kobena Arthur Kennedy
Dr. Kobena Arthur Kennedy, a member of the New Patriotic Party (NPP), says it’s disheartening to see President John Dramani Mahama-led government run to the International Monetary Fund (IMF) for a bailout after the country had worked hard to extricate itself from the grip of the Breton Woods institution.

The NPP bigwig, who has become one of the fiery critics of his own party, said the decision by the National Democratic Congress (NDC) government to turn to the Breton Woods institution hurts more because Ghana now produces oil.

‘If we were doing so well just before we struck the oil, why are we floundering once again, despite having oil?’ Dr. Arthur Kennedy wondered in a statement issued from his Irmo base in South Carolina, United States, yesterday.

‘Unfortunately, we have been here before. The IMF was around just before the Busia government was toppled by the ‘Yentua Acheampong government.’ It was around just before Rawlings came again, on the strength of ‘corruption and economic mismanagement.’ It assisted the Provisional National Defence Council (PNDC) regime and hailed Ghana as an ‘economic miracle.’ It assisted NDC-1 and the Kufuor administrations.

‘Indeed, with the latter, we went on to issue the first Eurobond by an African country after South Africa. With each of these bailouts and the hailing of ‘successes and miracles,’ reasonable people had assumed that we had turned the economic corner for good – only to find ourselves in the same soup again. This particular one hurts, especially because we have oil,’ he stated.

According to Dr. Arthur Kennedy, with the repeated cycles of bailing out by the IMF, there was the need to seek ‘some hard questions’ and find lasting solutions to such problems.

‘First, why do we keep needing help from the IMF? Second, is this present request for help meant to get more loans or to get policy advice – otherwise known as ‘apo’ or knowledge? If public sector wages are this high, was ‘Single Spine’ a mistake?’ he queried.

He added, ‘Do our governments find it hard to accept advice from the opposition? Are we going to the IMF to listen to the same advice that has been offered by Bawumia, Akoto-Osei and others? If that is the case, why is the opposition applauding the request to the IMF instead of challenging the government to do what it must do?’

He held that if the request to the IMF was for financial help, then Ghanaians reserved the right to ask what had happened to all the monies that had been borrowed since the NDC returned to power in 2009.

‘Should we have been more welcoming of Archbishop Duncan Williams’ offer of prayers? While all these are important questions, the biggest question is whether we are indeed here because of mismanagement and/or corruption,’ he added.

The renowned Economist magazine published that ‘Recently, Ghana has been living beyond its means. Public debt is rising rapidly and now tops 50% of GDP in official figures. Fitch, a ratings agency, puts it at even higher – 62%, taking into account a revaluation of its foreign-denominated debt. The main cause is a yawning fiscal deficit which stood at 10.1% in 2013.’

Confusing The Public
The NDC government has been giving conflicting signals about the proposed deal with the IMF.

President Mahama, before emplaning to the United States to attend the special African/American Leaders’ Summit, was reported to have instructed his economic team to start the processes that would lead to a bailout from the IMF – a move the Fund has even confirmed.

In another breadth, he and his cronies claim that their (so-called) ‘homegrown policies’ needed some approval by the IMF for the international community to have some confidence in government’s economic measures.

By William Yaw Owusu

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