​IMF Program Faces Uncertainty

By Adnan Adams Mohammed

Economists and financial analyst are divided on their advice to the incoming government led by President elect Nana Akuffo Addo on either to continue to run the International Monetary Fund (IMF) program with Ghana or to review it first before continuing.

Any sides the incoming government takes has a negative consequence on the economy and to the government.

But, with inference from some of the comments of the economists, it is likely the NPP government will renegotiate Ghana’s deal with the IMF in a bid to stabilize the economy.

According to some of the economists, renegotiating aspects of the IMF deal will save the country from further increase in its debts.

Economist Dr Adu Sarkodie has expressed that the new government must restructure the deal to grow the economy.

“We must renegotiate certain parts of the IMF deal. One of the items that have contributed to the slow effectiveness of the program is that they have front loaded the policies and programs and have kept the money. So in other words I go into a deal with you, I expect you to take certain good steps before I hand you the money but it has not been the case in the previous IMF programs.”

He added, “So I think that this time round the IMF should rather front load the money. They should frontload about 70% of the remaining 50% for us to stabilize because the macroeconomic stability is the most important thing.”

Ghana’s three-year agreement with the IMF which will see the disbursement of a total of 918 million dollars (USD 918,000,000), was approved on April 3, 2015.

The program aims to restore debt sustainability and macroeconomic stability in the country; to foster a return to high growth and job creation, while protecting social spending.

Meanwhile Dr Adu Sarkodie has cautioned the incoming administration to be cautious of some economic fundamentals in order to propel economic growth.

“If we are not vigilant and the exchange rate gets out of hand, it is going to multiply the external debt. Right now what we need to do is research our debt and grow our economy.” he concluded.

Ghana has so far received a total of about US$464.6 million as disbursements from the IMF.

The latest was on September 28, 2016.

The completion of the third review of Ghana’s economic performance by the Executive Board of the Fund led to the disbursement of US$116.2 million.

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