The Akufo-Addo government, begins its bailout discussions with the International Monetary Fund (IMF) today, but already there are indications that, it will have to let off some of its key programmes and projects, if it is going to realize its objectives of going before the Fund under a state of emergency.
The fanciful US$450 million National Cathedral, will have to be halted and so will the incessant rental of luxurious private jets from Europe to Ghana to fly the President on his foreign trips sometimes at almost US$22,000, be halted by the IMF experts to save cost.
Trade and Industry Minister, Alan Kwadwo Kyerematen, has opined that the IMF officials are not coming to create prosperity, but help the government streamline its activities and attain fiscal discipline.
It is being speculated that, this fiscal discipline will also mean cutting down on the size of his appointments, particularly the number of ministers whom most Ghanaians have lost count of.
Among the programmes making the rounds to be scrapped is the Nation Builders Corps (NABCO) which the government claims it had partially employed some 67,000 youth paying them GHC700 and above.
But the major programme to go down, is the much touted Free Senior High School (Free SHS) initiative which the Finance Minister, Ken Ofori-Atta, had long signaled his readiness to let go or review by having parents who can afford, to pay the fees for their wards do so.
The wholesale scholarship, is not sustainable as it has denied the Akufo-Addo government financial muscle to carry out other projects in roads and schools among others.
Many projects which have had their sods cut, have been abandoned because there was no funding for them. In cases where the projects started, the contractors have had to leave the sites, because the project had run out of funding.
The La General Hospital project is one of such projects. The sod-cutting ceremony was done on Tuesday, August 10, 2020, by President Nana Akufo-Addo, but the Sixty eight million euros (€68 million), with an insurance cover of three million, eight hundred and sixty thousand euros (€3,860,349.18), is yet to be take off.
The project, said to be financed by a credit facility from Standard Chartered Bank of the United Kingdom, with an export credit guarantee from Sinosure of the People’s Republic of China, hasn’t taken off yet.
The project is supposed to be undertaken by the Chinese company, Poly Changda, which has wide-ranging experience in China and other parts of Africa in the construction of healthcare facilities.
Upon completion, it will be transformed into a one hundred and sixty (160) bed facility, and it will be fitted with an outpatient department; inpatient wards; maternity and neonatal services; surgical unit with four (4) theatres; accident and emergency department; public health department; pharmacy unit; laboratory; administration; imaging area, with CT Scan, X-ray room, ultrasound, fluoroscopy, mammography units; physiotherapy unit; and a mortuary.
Meanwhile, in the case of the Free SHS, former Finance Minister, Seth Terkper, observed that the government’s flagship programme is taking a huge chunk of its resources, adding the cost of sponsoring the programme was unsustainable.
“Free SHS in its unfettered form is not sustainable. Your debt is not sustainable, and you’re borrowing. You’re using your whole revenue to cover compensation and interest. You’re borrowing for the past debts that you’ve borrowed to repay, you borrow to support free SHS. That’s not a palatable discussion,” he said.
Recounting how the Mahama-led administration dealt with an economic downturn, Seth Terkper, said it had to ‘tighten its belt’ in the continuation of some of its flagship programmes.
He indicated that the government then had to scale down on the number of ‘E-block’ schools it was constructing.
“We were in the Fund [IMF], when crude oil prices fell in 2015/2016. [Then,] our flagship programme was the E-schools. We initially stated that we were going to construct 200 schools.
“But when the reality hit, President Mahama indicated that we were not going to be able to complete all the 200, we may be able to do 150 and even with that, we rolled it into 2017, and 2018. We were able to construct about 70 when we were leaving office,” he recalled.
“So that’s the sort of decisions you have to make,” he added.
The IMF team is expected to arrive in the country today for the first engagement to take place. President Akufo-Addo on July 1, ordered Finance Minister to begin formal engagements with the IMF.
In a statement signed by Information Minister, Kojo Oppong Nkrumah, the engagement will be to invite the Fund to support an economic programme put together by the government.
“Among other things, the government says the IMF support will provide “balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the COVID-19 pandemic, and recently, the Russia-Ukraine crisis.”
Speaking on the IMF bailout, Trade and Industry Minister, Mr Kyerematen says
“The IMF itself cannot create prosperity for us, however, it comes in purely for stabilisation, balance of payment and liquidity support,” Mr. Kyerematen said at a meeting with businessmen and captains of industry in Accra.
He also assured Ghanaians that, the government will put its best foot forward during negotiations with the IMF team.
The Ministry of Information, in a statement announcing the President’s directive, said the Minister for Finance, will be leading the negotiations with the IMF.
The news has been received with mixed feelings. The Government of President Akufo-Addo, initially condemned the IMF on several platforms, vowing never to seek any form of support from the fund.
Labour unions, including TUC have lambasted the government for its decision to seek support from the fund.
They said government resorting to the IMF means the economy will likely reel under several restrictions and controls to be imposed by the fund.