Ghana to seal a deal with IMF by February – Kwesi Botchwey

General News of Wednesday, 7 January 2015


Prof. Kwesi Botchwey New New

Ghana is expected to conclude a program with the International Monetary Fund by end of February this year.

This was revealed by the leader of the government’s team of negotiators talking with the IMF, Professor Kwesi Botchwey.

The country in September last year entered into negotiations with the Fund with the hope of securing a three -year program with the IMF. However due to some concerns raised by the EU, negotiations were briefly suspended.

The European Union raised issues with corruption and payroll fraud in the country’s public sector. The EU was reported as withholding a £135 million budget support to Ghana due to an alleged payroll corruption scandal it is investigating.

According to a British newspaper, Sunday Times, the EU anti-fraud agency was probing a mam­moth corruption scandal running into several million pounds in Ghana, being aid package from the EU to support the country’s budg­et among others.

The EU itself was accused of trying to cover up with Ingeborg Grässle, a German Member of the European Parliament who chairs the budget control committee that scrutinises EU spending, quoted as saying, “It is outrageous that the European Commission failed to inform the European Parliament about the potential loss of huge amounts of taxpayers’ money to corruption, even over a year after they froze the payments to Ghana.”

The head of the EU delegation to Ghana, Ambassador William Hanna was forced to deny the accusations of a cover-up.

“Many of the allegations made in this article are wrong. The European Commission did not cover up its action; it was not late in informing the European Parliament, and it is not correct that there is a lack of control of budget support. However, we do agree that the problem of ghost workers, and payroll system weaknesses in Ghana has to be addressed urgently. This and other key structural reforms, now being discussed with the IMF are needed to improve Ghana’s economic situation,” he said.

The issues raised by the IMF nonetheless forced a brief suspension of the discussions with the Fund.

But Prof. Botchwey in an interview with Joy Business’ George Wiafe, said “The irony of this payroll dispute is that the revelations that came out which were seized upon outside as evidence of some kind of crisis and fraud…are revelations that came about as a result of initiatives that the President himself ordered.”

The issues had been discussed with the EU Delegation and an agreement reached.

Prof. Botchwey, therefore, believes Ghana seal a programme with the Washington-based lender by the end of February. This is necessary to in government’s own words, bring policy credibility to government’s policies and enhance stability in the economy.

The local economy remained largely wobbly last year with many indicators performing worse than anticipated. A historic depreciation of the local currency, the cedi, created a spiral in many respects even though the last quarter of the year saw some level of stability.

It is hoped that a programme with the IMF will strengthen the economy by introducing fiscal discipline which analyst believe has been lagging.