Professor Peter Quartey, Director of the Institute for Statistical, Social and Economic Research (ISSER) of the University of Ghana has hailed government’s decision to engage the International Monetary Fund (IMF) for a bailout in the face of rising economic challenges.
He says the move is a giant step in the right direction, describing it as one that is not a ‘bad option’.
Government has backtracked on its insistence not to take Ghana back to the IMF.
President Nana Addo Dankwa Akufo-Addo has thus instructed the Finance Minister to begin formal engagements with the Fund for a support program – a development many economists and other financial analysts have welcomed.
“Let me say that IMF is not a bad thing because it is the second-best option after our home-grown solutions. But if that is not happening, we need to seek support from the IMF. So, I don’t think it’s a bad option”, says Professor Peter Quartey on Citi TV.
He said concerns about whether the country dragged its feet before heading to the Fund are neither here nor there.
“I don’t see where the delay is. Government introduced a number of cost-cutting measures and after evaluation, it has realized that the revenue is not coming in as expected, so it thinks that we need an IMF support.”
He is asking government to use the opportunity to seal the country’s revenue shortfalls to boost investor confidence, given the effects of the COVID-19 outbreak and the war between Russia and Ukraine.
“The negotiations will help us cut down spending and take certain tough decisions to help revive our programs without comprising our growth targets. This time things should be different because of the COVID-19 pandemic and the Russia-Ukraine war, so I expect they factor them into it so that some of the austere measures they come with will be fashioned out in the context of where we find ourselves as an economy.”
In March 2022, Ken Ofori-Atta announced that the government will not go to the IMF but rely on a domestic economic recovery plan, however, being unable to meet its growth targets with the plan, the government is now going to the IMF for support.
The Information Ministry explained that this decision was taken at a meeting on June 30, 2022.
“The engagement with the IMF will seek to provide a 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 crises.”