The recent “free money” of USD$ 1 billion that the Akufo Addo administration claimed it recently received from the International Monetary Fund (IMF) is already generating suspicions.
On August 23, 2021, the Finance Ministry announced the arrival of the money and claimed it was virtually unconditional and free to be spent to support the economic recovery efforts.
According to the Ministry, the money is Ghana’s share of the increased allocation of funds to the IMF by its 190 member countries Known as special drawing rights (SDR), and that the amount was doled out to Ghana based on the value of shares that Ghana holds in the IMF as a member country.
As a result, the money will not come with the usual conditionalities that normally accompany financial supports from the Bretton Woods institution.
But economists are warning that this blank cheque by the IMF will spell doom for Ghana given how the conditionalities, the Akufo Addo administration had squandered the first US$ 1 billion that was given to Ghana during the height of the first COVID-19 wave in 2020.
Civil society groups that investigated the expenditure from that earlier IMF fund discovered wanton waste of funds, dubious sole-sourced contracts and inflated prices of goods and services.
The Dean of Business School of the University of Cape Coast, Prof. John Gatsi said impressions created by Finance Minister, Ken Ofori-Atta about the IMF money being some free money was deceptive and that the government had actually requested for it because the Akufo Addo administration badly needed the bailout.
According to him, that money would be well-spent if the Akufo Addo administration does not brush it off as free money. According to Gatsi, the spending of that money required utmost transparency and accountability like any money secured from the IMF.
“Truth is if we don’t need it we will not go for it. What is left is the assurance of transparency in the use of this money bearing in mind we are yet to read the Covid expenditure audit report. Government should quickly announce how it planned to use this money to ensure accountability,” Prof. Gatsi stated.
“A bailout is just a financial support or assistance to reduce difficulty or to avoid the collapse of an economy…In 2020 Ghana actually went to the IMF with approval from parliament to receive one billion United States dollars equivalent to six billion Ghana cedis to reduce the sharp pain and avoid the imminent collapse of the economy.”
