Former Minister for Finance, Seth Terkper, has questioned how government intends to finance its current GHS 43bn fiscal deficit if it has decided not to heed to calls for the country to go for an IMF programme.
According to the Finance Minister, given the country’s inability to access the international capital market, it is going to be difficult for the government to finance its fiscal deficit.
Mr Terkper is of the firm view that going to the IMF will aid government address its fiscal deficit problems as it will provide government with additional funds to refinance its debts.
“We currently have a deficit of GHS 43bn which includes amortisation to finance, now if we divide this deficit by eight (8) then that gives you like GHS 5bn of deficit to finance each year, and we haven’t gone to the market or raise enough revenue, so where do we get the money to deal with the deficit.
“If we are not going to the IMF, then where are we going to get the money to refinance our debts,” he quizzed speaking on the Business Edition of the Joy News’ PM Express monitored by norvanreports.
Meanwhile, the former Finance Minister, Seth Terkper, is questioning the existence of a ‘Home Grown’ policy by the government which is to help address imbalances within the economy.
This is coming after a Deputy Finance Minister, Dr. John Kumah, stated that government will consider a programme from the International Monetary Fund if a ‘Home Grown’ package fails.
“If our programmes fail us and we are not able to get the confidence and the results in the fiscal space discipline, which we have to impose on ourselves, then we don’t have a choice”, the Deputy Finance Minister remarked during an interview.
But speaking to Joy Business, Mr. Terkper said he is unaware of a ‘Home Grown’ package, unless government has sent a document to the Fund, indicating it has started such a programme.
“The point is that where is the ‘home grown’ package. One may exist internally, but as far as I’m concerned there is no homegrown programme package from the government. Maybe they [government] know something we do not know”.
“The IMF has always been an option for developing countries and let me say we did not wean ourselves of the IMF. We went to the IMF for the COVID-19 loan of $1bn and we were not the first to rush for it”, the former Finance Minister pointed out.
“We went in for the SDI of one billion dollars; up to about six billion US dollars has so far flown into the account of government due to COVID1-9. This include the bailout from the Bank of Ghana. So if all this didn’t provide the relief, then we have a major problem”, Mr. Terkper added.
