Business News of Friday, 28 July 2017
The Institute of Fiscal Studies (IFS) has impressed on the NPP not to completely cut ties with the International Monetary Fund (IMF) even after completing the three year program in 2018.
The IFS explains that the government’s plans to exit the program after 2018 may be necessary only if it is able to meet set economic growth targets independently.
The suggestion for Ghana to sustain its ties with the IMF comes on the back of calls for a strict enforcement of fiscal discipline in order to reduce the budget excesses.
The Executive Director of the IFS, Professor Newman Kusi explains the government should tap into the advice from the Fund even after December 2018.
“So even if the government does not have a formal agreement with the IMF still there’s an opportunity for the IMF to interface with the government through the article 4 consultation. Because Ghana is a member of the IMF every country has to have that relationship with the government,” he said.
Prof. Kusi added, “Having a formal arrangement with the IMF depends on the government’s ability to be able to implement the required measures on their own. So if the government thinks they have got the tenacity and the discipline to implement all the necessary measures then fine they can go ahead.”
A former Finance Minister, Seth Terkper has also suggested that the NPP government taps into financial and technical advice from the IMF under the Policy Support Instrument (PSI).
Mr. Terkper argues that the plan would not necessarily result in any financial commitments but is necessary to put government in check.
But government maintains it will least engage in such agreement.
The Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah in an interview asserted that the intervention by the IMF has least developed Ghana’s economy hence the decision not to continue with its programs.