The Bolgatanga Central Member of Parliament (MP), Isaac Adongo, believes the extension of Ghana’s programme with the International Monetary Fund (IMF), is an admission from the Akufo-Addo administration that, it needs the guidance of the fund.
He explained on Eyewitness News that, the current government now views the IMF programme as giving it more credibility for investors, although it had condemned the arrangement in the past.
President Akufo-Addo, as recently as July 2017, stated that his government, would not extend the programme after it ended on December 2018.
But the IMF, upon concluding its fourth review of Ghana’s programme on Wednesday, August 30, 2017, extended the programme by one year and approved a $94.2 million disbursement.
Recently, the Vice President, Dr Mahamadu Bawumia, ridiculed the economic management team of the erstwhile John Mahama administration, saying they do not come close to the current managers of the economy, but the decision to stay with the IMF, is seen as nothing different from what both President Akufo-Addo and Dr. Bawumia, had condemned, while in opposition.
Dr. Bawumia, had told delegates attending the governing New Patriotic Party’s (NPP) 25th Annual Delegates’ Conference in Cape Coast in the Central Region, two Saturdays ago that “In fact can anyone remember the NDC economic management team? I’m sure they themselves cannot remember who a single member of their economic management team was.”
He assured the delegates that the “Akufo-Addo has replaced incompetence with competence with the management of the economy” boasting of persons making up the current economic management team including former Finance Minister, Yaw Osafo Maafo and Finance Minister, Ken Ofori Atta.
“The era of reckless borrowing…thankfully is over,” he said while giving the assurance that government expects debt to GDP ratio to drop from 73percent to 71 percent at the end of the year.
But, Mr. Adongo, was keen to note that this development was at odds with earlier indications from the President and Minister of Finance, who were “very emphatic” that Ghana would be weaning itself beyond 2018.
Per the IMF’s assessment, Ghana showcased a mixed macroeconomic performance, with significant shocks being amplified by policy slippages and resulting external and domestic imbalances.
Growth in 2016, was at low of 3.5 percent, though the IMF said, some recovery of growth is expected in 2017-18, owing to an increase in oil production, declining inflation, and lower imbalances with the right policy implementation.
Dr. Bawumia, announced implementation of a number of campaign promises, such as the Free Senior High School (SHS) programme, reinstatement of allowances for nursing and teacher trainees, which he said, will happen “in a few weeks (September)” when the academic calendar begins.
Dr. Bawumia, jeered at the opposition National Democratic Congress (NDC), which kicked against the policy on the grounds that it was not feasible.
“When you think impossibility you will act in impossibility,” he said indicating the NDC and then President John Mahama “were thinking in the realm of impossibility; they were not thinking in the realm of Nana Akufo-Addo”.
According to him, the achievements of the Akufo-Addo government, which is barely eight months old, “is a manifestation of competent economic management”.
He said, the re-profiling of the economy has led to an extension of tenor with the issuance of a 15-year bond which the first in the country’s history against the 10-year old bond issued by the previous administration.
He noted that, the yield curve at the primary issuance of domestic bonds, has also improved significantly compared to the trend in recent years-
Provisional estimates show that the trade account recorded a surplus of US$1,429 million for the first half of 2017, due to a significant increase in export earnings combined with lower imports, the Vice President stated.
This he said, compares to an almost equivalent deficit of US$1,403.7 million over the same period in 2016.
Going on this assessment, Mr. Adongo said, “At the end of the day, we are being confronted with an economic growth module that is reliant on oil growth.”
He said, the government was only continuing along with the IMF, “because they feel that the IMF gives them a better credibility to give confidence to the investors than their own economic management module.”
“So are we now saying that, the IMF, is the one that we are looking to for policy credibility in order to improve investor confidence in Ghana?”
The MP noted further that, government raised GHc 12 billion in March, but subsequently, the highest they have been able to raise is about GHc 1.5 billion.
“…It tells you that investor confidence is waning and they themselves don’t have a solution that will appeal to the investors and they need a hand holding and the comfort that the IMF gives – the very comfort that was sought by President John Mahama.”
“With all the theories of Dr. Bawumia… they still have to go back and resort to a very poor economic management module of the IMF, which is now the solution of a government that is supposed to be far better than us,” Mr. Adongo said.