Ghana must put on hold, for at least a year, any plans of seeking financial bailout from the International Monetary Fund, the Chairman of the Finance Committee of Parliament has suggested.
James Avedzi told Accra-bassed radio XYZ that though Ghana may need such a bailout in the short term, he would rather the country waited a little longer, to see what fruits will be yielded from certain home-grown measures that are currently being implemented to shore up the economy.
“Now there are challenges, so we might want the Fund to assist. And when the Fund is coming for a programme, they come with a lot of conditionalities and most of those conditionalities that they’ll be thinking about, we are already implementing…so the question is ‘why don’t you wait for a while and see the outcome of those things that you’ve started implementing?’”
According to him, “if you wait for some time and it’s not working then you think about getting assistance, but if you start implementing home-grown solutions and at the same time rushing to go for assistance, you might not see the effect of your own domestic programmes…so that is why I said we might need it, we might not need it. But if you asked me, I’ll say let’s wait for some time and see how our measures that we are putting in place are going to work before we take a decision.”
Ghana has already done away with subsidies on utilities and also intends freezing public sector wage increments for 2014. There has also been a freeze on public sector employment.
Mr Avedzi also denied earlier reports that the Ghanaian delegation that went to the IMF/ World Bank Spring Meetings in Washington recently, of which he was a member, had intended to put in a bailout request.
Ghana’s economy is currently experiencing some turbulent times with the local currency tumbling against the dollar and other major international currencies of trade. The country also spends more than 70 percent of tax revenue to pay about 650,000 employees in the public sector.
The Bretton Woods Institutions have had cause to complain about the huge amount of tax payers’ money doled out to pay workers. It totals about Ghc9.2 billion.
The amount has been blamed largely for the spiraling budget deficit experienced in the past few years. Also ratings agencies like Fitch and Moodys have downgraded the country’s prospects and outlook several times in the past few months.
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