A senior lecturer at the University of Ghana, Professor Godfred Alufar Bokpin, has stated that the country’s economic salvation is not in the hands of the International Monetary Fund (IMF). He said that previous support from the IMF has failed to achieve its intended outcomes. The economist and Professor of Finance made this statement on Tuesday, June 28 on JoySMS.
The professor made this statement when a leading member of the New Patriotic Party, Gabby Asare Otchere-Darko, tweeted on Monday, June 27 that the government is likely to go to the IMF program. He said that the Electronic Levy has failed to meet its expected revenue, and cannot raise enough funds for the country, this action is necessary.
Ghana’s Relationship with the IMF
Ghana was the beacon of hope for the sub-Saharan African Region because it was the first to gain independence in 1957. The country has significant natural resources and compared to other African countries in the region, Ghana has a highly educated population. Following the overthrown of Ghana’s president, Dr. Kwame Nkrumah in 1966, the country’s political stability and the economy suffered for nearly two decades. The was a prolonged drought in the country in the early 1980s followed by the expulsion of Ghanaian citizens in Nigeria, the burden of the government increased, and seek for IMFs assistance to reverse the mess in the country.
Over the years, Ghana has resulted in the Bretton Woods institutions whenever there is an economic crisis within the nation. The country chalked some success under the program of the IMF as the country attained macroeconomic stability, encouraged privatization of state-own enterprises, and built institutional capabilities. After two decades of the initiative, surprisingly in 2001, under the leadership of Former President Kufuor, the country was classified as a highly indebted developing country.
From mid- 2013 to late 2014, policy slippages and high rising interest costs undermined the efforts of the government to attain a fiscal consolidation. The exchange rate depreciated the cedis sharply, and inflation was very high. In April 2015, under the leadership of Former President Mahama, Ghana entered a three-year IMF-backed stabilization program. It was the 16th since the independence of the country and it was aimed at restoring debt sustainability and macroeconomic stability to help in high growth and job creation while protecting our spending. The program was extended for a year and ended in April 2019.
IMF has Failed Ghana
The core mandates of the IMF are to promote financial stability and promote employment, and sustainable economic growth, but after Ghana enrolled in the program for sixteen (16) years, the country has not achieved any of this. Citizens asked about the implication and their ramifications on the development of Ghana after sixteen years of IMF and World Bank adjustment programs. The IMF always forecasted that Ghana will have a fast-growing economy in the world and projects a growth rate of 8 to 10% for the country, yet the same cannot be said just years after exiting the program.
President Akufo-Addo promised the citizens of Ghana that Ghana would not go to conditionalities of the IMF as it halted employment in the country for years, but Ghana is running back to them now. The IMF programs should be a watershed in the history of Ghana’s economic development and self-sustainability, but the programs keep multiplying and depreciating our economy. Although Ghana’s economy is in tatters now, history has proven that going back to IMF is not the right decision as it will depreciate our currency and deepen our economic dependency.