TUC Against Terkper’s IMF Suggestion

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As Mahama Hunts Ghosts On Gov’t Payroll

Ghana’s Trade Union Congress (TUC), has told President John Dramani Mahama, not to go for a financial bailout from the International Monetary Fund (IMF).

TUC Secretary General, Kofi Asamoah, told the President directly at yesterday’s May Day Celebration at the Independence Square in Accra that, bailouts from the IMF in the past are to blame for the country’s current economic woes.

Finance Minister, Seth Emmanuel Terkper, recently said, government may turn to his former employers; the International Monetary Fund (IMF) to help restore economic stability.

“We are a member of the IMF, and an IMF member that finds itself in difficult times can fall on the resources of the fund.
The IMF, still remains a lender of last resort”, he told Kofi Amoabeng’s Business and Financial Times newspaper in reaction to a statement by former Deputy Governor of the Bank of Ghana, (BoG) Dr Mahamudu Bawumia, that an IMF bailout may become necessary by year end, if the economic situation does not improve.

“I don’t see it as a warning”, said Mr. Terkper of Dr Bawumia’s statement, adding “We’ve never ruled it out. If it becomes necessary, we’ll fall on the fund.”

But TUC boss, told President Mahama, “Your Excellency, times are hard; the prognosis on the economy is not good either, but we must at this point resist the temptation to seek IMF bailout. As we have stated, it is the IMF-sponsored policies that have brought us almost to the brink. No country has developed following the advice of the IMF. Resorting to the IMF for financial support was a mistake we made in the past. We must take responsibility of this mistake and find a solution to our problem”.

The theme for this year’s celebration was “Ghana’s Economy: A Concern for All”.

The Union’s caution comes on the heels of reports that the government intends seeking assistance from the IMF to fix the ailing economy. Rumours of a possible request for a bailout were rife prior to the finance minister’s recent participation in the IMF/World Bank Spring Meetings in Washington.

The country’s local currency – Cedi – has fallen in value by about 20 percent since January 2014. About 70 percent of tax revenue is also used to pay salaries. Both the IMF and the World Bank have blamed the situation for the worsening year on year budget deficit. The Government is also moaning that the situation leaves very little resources to invest in social and economic infrastructure. There are some statutory payments which have still not been honoured by the Government. Also, some contractors who have done different jobs for the state are still being owed.

Speaking at this year’s May Day celebrations at the Independence Square in Accra, President Mahama on his part gave the assurance that the economy was recovering and the future looks bright,

“This year is a turn-around year for Ghana and I am positive that the Ghanaian economy will show strong signs of recovery by the end of this fiscal year,” he stated.

He said even though some of the ‘home-grown strategies’ being implemented to revive the economy are harsh, “I assure you my countrymen and women, that these measures are achieving the desired effect and the economy is gradually responding.”

Many analysts, locally and abroad, believe the Ghanaian economy has suffered major dislocations with the local currency suffering a record loss in value in the first quarter of this year.

Inflation has inched up and the debt-to-GDP ratio is said to have crossed the critical 60 per cent mark.

The president conceded that there exist major challenges, but maintained government’s measures at stabilising the economy was yielding positive dividends.

He said, clear measures had been instituted to deal with corruption which is said to be worsening.
President Mahama assured that, among the economic reforms to be undertaken, payroll integrity will be given utmost attention.
“We are committed to plugging loopholes in our revenue systems and will carry out the reforms in our revenue administration to ensure sustainable economic growth…In the next few months, we will initiate a massive payroll audit with the view to eliminating the pervasive ghost names and ensuring that these ghosts die a permanent death and resurrect no more,” he stated.

He announced that a national economic forum will be held this month to solicit other views of solving the economic challenges.
President Mahama said, most of the challenges the country was facing was as a result of the low productivity churned out by workers despite the high inputs invested in them by the government.

“Many of the current challenges we are facing are precisely because of the apparent disconnect between our new found middle income consumption habits and our low income productive capacity,” President Mahama pointed out.
He congratulated all workers, stressing home the fact that the National Democratic Congress (NDC) as a social democratic party, views labour an ally.

“We are and will remain allies working for a greater common cause,” he mentioned.

President Mahama noted that, as a result of the new lower middle income economic status of the country, reforms are being carried out to “bring our institutions of policymaking and development management in line with those of a lower middle income country and ultimately place them in line with those of an upper middle income country.”

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