Posted: Tuesday 5th August 2014 at 8:06 am

IMF bailout should be youth-focused – Group

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The Reform for Youth Empowerment has given its unflinching support to the government’s decision to seek financial bailout from the International Monetary Fund and other development partners.

It however charged the government to take advantage of the bailout to reduce youth unemployment in the country, which has been the bane of successive governments.

‘It is our hope that the NDC Government will take full advantage of the IMF economic/financial bailout by building a strong and viable economy focusing on reducing youth unemployment, promoting economic opportunities and enhancing favourable macroeconomic environment. We cannot afford to fail as NPP failed,’ Ebenezer Arkutu, the group’s General Secretary stressed in a statement to myjoyonline.com.

Government’s decision to resort to the IMF bail-out to put Ghana’s ailing economy on track has received mixed reactions from economists, academicians and politicians.

For instance, Head of the Political Science Department at the Kwame Nkrumah University of Science and Technology (KNUST), Professor Richard Amoako Baah has hailed the decision as ‘a step in the right direction'; but warned it could have dire consequences.

But a former Trade and Industry Minister under the erstwhile Kufuor government, Dr. Kofi Konadu Apraku says the move is an admission of the government’s incompetence in managing the economy.

The government, he argued, has ‘successfully taken our economy back to where we were 20 years ago’.

But the Reform for Youth Empowerment is confident partnering the IMF will ensure that right economic policies are in place to address the economic fundamentals in working towards favourable macroeconomic stability.

‘This bailout is to afford government the final opportunity to deal with the short/medium-term development cost for the attainment of a Lower Middle Income Economy at the back of the withdrawal and/or cut down of concessionary loans by 50/above percent and development grants by the Donor Community.

‘It is this major development setback coupled with the decline in prices of our country’s major export commodities (i.e. Cocoa and gold) as well as the public sector wage bill ( constituting 70 percent of government’s revenue)which are the troubling factors undermining government’s strong policy measures in significantly reducing the stressful internal socio-economic conditions threatening not only to erode our economic gains but potentially seeking to undermine the competitiveness of companies/businesses and quality of life of the citizenry.’

 
Read the Full Statement Below
 
WE SALUTE GOVERNMENT’S IMF BAILOUT DECISIONLONG LIVE GHANA!!

In the absence of debt cancellation/debt relief – We welcome and support the pragmatic economic decision of government to opt for bailout from the International Monetary Fund (IMF) to address the slow economic recovery by seeking increasingly needed capital investments to boost greater economic growth and development by ensuring macroeconomic stability environment. Also, to increase greater confidence in the management of the Ghanaian economy by putting to rest the needless propaganda by partisan critics fuelling unproductive speculation of economic crisis – aimed at undermining market price stability as well as harming  investor confidence.

This decision by the NDC Government under the leadership of President John Dramani Mahama is to further consolidate not only  our economic recovery efforts but also to finally encourage the International Monetary Fund (IMF), World Bank(WB)  and the International Development Partners (IDP’s) to accept our home grown economic development plan – to ensure that within the shortest possible time the needed economic development is not unnecessarily delayed, the needs of the people are met and their dreams/aspirations are not deferred.

We are mindful of the fact that government identified the fiscal deficits as the country’s underlying short-term challenges facing the Ghanaian economy. To this end, Government through fiscal/monetary  policies have not only  successfully managed to reduce significantly the effects of the short-term fiscal challenges on corporate Ghana but also working vigorously in putting the economy into recovery gear: removal of mistargeted/unproductive subside regime, rationalization of public sector employment and downsizing government ministries, broadening tax base, reducing tax fraud, removal of misplaced tax exemptions, recovering misappropriated public funds, reducing public sector corruption and removal of ghost names, to name but a few.

In addition, government has placed moratorium on acquisition of new loans except for contingency loans in other to control and firmly sustain government debt to GDP ratio. Whilst committed to reducing to 35 percent from 70 percent public sector wage bill currently constituting government’s revenue expenditure by 2017. Also the Single Spine Pay Policy has cost over GH7million to government in compensation expenditure in implementing the pay policy from 2010.

This bailout is to afford government the final opportunity to deal with the short/medium-term development cost for the attainment of a Lower Middle Income Economy at the back of the withdrawal and/or cut down of concessionary loans by 50/above percent and development grants by the Donor Community. It is this major development setback coupled with the decline in prices of our country’s major export commodities (i.e. Cocoa and gold) as well as the public sector wage bill ( constituting 70 percent of government’s revenue)which are the troubling factors undermining government’s strong policy measures in significantly reducing the stressful internal socio-economic conditions threatening not only to erode our economic gains but potentially seeking to undermine the competitiveness of companies/businesses and quality of life of the citizenry.

It must be noted, however, that this bailout decision by government is coming at the back of the visionary leadership of President John Dramani Mahama in achieving significant development investments in all critical sectors of the economy, particularly developments in economic infrastructure investment. Also, for ensuring that right underlying economic policies are in place in addressing the economic fundamentals in working towards favourable macroeconomic stability.

This administration through ongoing economic infrastructural investments has demonstrated strong political will/policy vision of import substitution aimed at building a value added export economy in order to bridge the gap of our current trade deficits of US$ 20 billion.The continuous widening of our trade deficit with the rest of the world economically is unsustainable and a clear threat to national security. This is to blame for the decades of collapsing manufacturing/industrial sector, growing but limited Small and Medium Scale Enterprises (SME’s); all of these fuelling poverty and lack of employment opportunities for the teeming unemployed youth.

The erstwhile Kufour’s administration failed with debt cancellation/debt relief and left behind a broken economy riddled with huge debt and dysfunctional state/government institutions.

It is our hope that the NDC Government will take full advantage of the IMF economic/financial bailout by building a strong and viable economy focusing on reducing youth unemployment, promoting economic opportunities and enhancing favourable macroeconomic environment. We cannot afford to fail as NPP failed.

SIGNED
EBENEZER ARKUTU
GENERAL SECRETARY

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