Reverend Dr Samuel Worlanyo Mensah, an economist, has urged the government to adopt measures to sustain the expected economic gains by the end of the year.
He said the economic indicators pointed to a better economic performance by the end of the year 2023, but expressed fears the government had not put in serious measures to sustain the anticipated gains.
The economist and pastor made the call in an interview with the Ghana News Agency (GNA), in Accra, on his impressions of the economy after Ghana’s programme with the International Monetary Fund (IMF).
Last May, the Executive Board of the IMF approved a 36-month arrangement with Ghana under the Extended Credit Facility (ECF) in an amount equivalent to SDR 2.242 billion around US$3 billion. The Fund soon disbursed the first tranche of US$600 million.
The first tranche of the bailout was expected to be used to bolster Ghana’s foreign currency reserves and help stabilise the cedi as well as for budget support.
Also, the World Bank is expected to advance US$ 300 million in budget support to Ghana pending the approval of second tranche of funds the IMF Board, expected to meet by November 22, 2023.
Ghana has been facing severe economic and financial challenges, including defaulting on some of its domestic and international debt, and as result, declared a moratorium on its international debt in December 2022, and further technically defaulted in February 2023 after failing to pay a coupon.
The programme, based on the government’s Post COVID-19 Programme for Economic Growth (PC-PEG) aims to restore macroeconomic stability and debt sustainability, includes wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth.
As part of the bailout agreement, the IMF will monitor the implementation of Ghana’s economic programmes anchored on restoring macroeconomic stability, ensuring sustainable growth for the macro-economy and laying the foundations for stronger and more inclusive growth
Dr Mensah said Ghanaians faced harsh economic conditions, and “life was quite unbearable between June and October 2023.”
He was, however, confident that the indicators pointed to a better economic performance in the last quarter of 2023 and attributed the expected improvement to the adoption by the government of the conditions attached to the bailout.
“I think gradually the economy of Ghana is bouncing back, because if you look at the fundamental indicators you will realise that the economy is bouncing back due to two major factors, and these are debt restructuring and the IMF programme,” he stated.
He noted that the debt restructuring had allowed the government to postpone its financial obligations to many lenders leading to positive policy and growth rates.
Part of the conditions was for the IMF to monitor government spending.
Dr Mensah lauded the government’s decision not to overspend beyond what was budgeted.
He was, however, not convinced that the government had taken the reforms seriously.
He said: “The government has not taken the reforms seriously. They are doing so because the bailout has not fully been released.”
Dr Mensah, who is also the Executive Director of the Centre for Greater Impact Africa, a non-governmental organisation, urged the government to sustain the gains.
He said: “The government has to do everything possible to convince the Bretton Woods institutions that we are capable of managing a prudent economy, and for that matter the expected disbursement should not face any shortcoming.”
Dr Mensah suggested to the government also to direct the Ministry of Finance, the Bank of Ghana and the Economic Management Team to be more proactive in ensuring that more good programmes and policies were rolled out to help develop the local economy in achieving sustainable national development.
GNA