Business News of Wednesday, 6 September 2017
Economist, and Senior Fellow at the Institute of Fiscal Studies(IFS), Dr. John Kwakye has supported government’s move to extend the International Monetary Fund(IMF) programme to enhance fiscal discipline.
The IMF last week announced that it has extended its programme which was originally scheduled to complete in April 2018 to April 2019. Under the programme, Ghana is expected to benefit from a 918 million dollars External Credit Facility.
Speaking on the Citi Breakfast Show, Dr. Kwakye maintained that until managers of the public purse are prudent in their actions, Ghana will need the IMF to avert fiscal slippages.
“The fact is that we cannot discipline ourselves when we are on our own. So we need this external anchor called the IMF to come and impose that discipline on us. We don’t need the IMF if we can do the things on our own.
It is not as if we don’t even know what to do, because the policies that they come to prescribe for us, we know them already,” he observed. Dr. Kwakye argued that government’s involvement in overspending; particularly in election years is the bane of the economy.
He stated that Ghana is then always forced to go back to the IMF to help instill discipline in the economy. “When we run into this situation of unsustainability, then the question is you have to try and consolidate, you have to adjust, especially during post election periods,” he stressed.
Dr. Kwakye recalled that the recommendations from the IMF in previous times have always focused austerity. “That is why we have to retrench, we have freeze employment, we have to raise taxes, we have to cut expenditure and so on. We can’t on our own be discipline then we have to bring the in the IMF. If we are disciplined enough then we don’t need the IMF”.