Former Finance Minister Seth Terkper has reiterated calls for the Nana Akufo-Addo government not to completely exit the International Monetary Fund(IMF) programme which is scheduled to end by April 2019.
Ghana, according to him is a member of the IMF and must continue to remain part of the fund to avoid fiscal slippages.
Ghana entered into an extended credit facility with the IMF for economic assistance in 2015.The deal came with an initial funding support of 918 million dollars to be disbursed under eight tranches.
Under the agreement, government was expected to implement some policy initiatives such as freeze of public sector employment, reduction of budget deficit, and zero financing of the budget deficit by the Bank of Ghana.
Speaking at the final outdoor event of the Citi Business Festival named “Economic Outlook”, Mr. Terkper maintained that exiting the programme completely could lead government overspending in subsequent years.
He observed that some African countries have tested the system under the Policy Support Instrument of the IMF and it has enhanced fiscal discipline.
“I have expressed this views before, it’s been published. I believe rather than exit completely, we should take advantage of the policy support instrument of the programme which is what Kenya, Rwanda and other African middle income countries have with the IMF and that will afford us a smooth transition,” he stressed.
He cautioned that the signals sent by the current government on its desire to quickly exit the programme when it is over gives an impression that the country wants to go back to previous activities that have constantly taken Ghana back to the fund.
He pointed out that it is important to look at the past interaction with the fund to inform government on how it will proceed going forward.
“Our affiliation with the IMF and the multilaterals span 1985 to 2000s and you can see that that was when our economic relations with the multilaterals including the World Bank, African Development Bank seriously started”
He argued that the period between 2000 and 2010 could be described as rapid expansion in services and in construction, when services overtook Agriculture as the largest share of Ghana’s GDP.
Mr. Terkper stated that the country’s relationship with the IMF and the multilaterals have proved positive with some policies that have propelled economic growth and development.
Deputy Finance Minister
On his part, a Deputy Minister of Finance, Charles Adu Boahene who was part of a panel discussion said government is putting in measures to sustain fiscal stability after the country exits the IMF programme.
He assured that government is keen on reducing the fiscal deficit below 5 percent to avoid slippages.
PEF President
Meanwhile, the President of the Private Enterprise Federation, Nana Osei Bonsu was of the view that the program has brought some hardship as government was constrained from spending to expand the economy.
The panel at the forum was made up of Deputy Finance Minister, Charles Adu Boahene, former Finance Minister, Seth Terkper, Head of Research at the Trades Union Congress Kwabena Otoo, CEO of the Private Enterprise Federation Nana Osei Bonsu as well as the Head of the Economics Department at the University of Ghana, Prof. Peter Quartey.
Citibusinessnews
