IMF programme could be helpful but not urgently needed – Pierre Frank Laporte
The World Bank Country Director for Ghana, Liberia and Sierra Leone, Pierre Frank Laporte, has noted that an IMF programme could be helpful for Ghana, but it is not urgently needed.
His assertion follows calls for government to quickly sign up to a Fund programme to save the economy from troubles.
Speaking in an interview, Mr Laporte indicated that if Ghana can take tough and corrective measures, then an IMF programme shouldn’t be under consideration.
“If Ghana goes into an IMF programme today, it can help certain situations, for instance if Ghana wants to renegotiate some of the debt, it will put it in a better position because when it goes to creditors to say I want to renegotiate my debt, then they will say ok, what assurance do we have that your economical framework is good enough to pay us back when we reschedule. And then the IMF programme serves as guarantee. But at the same time the country can go forward and do things without the IMF, to the extend that a country is achieving moderate debt, is having good revenue collection level on its own and managing its fiscal well, it doesn’t need the IMF.
“There’s a mixed picture in Ghana whereby your growth is okay but your revenues are not strong enough, your debt is large, but you can do it without the IMF. But also the IMF can always give you something extra to do,” he said.
Meanwhile, the International Monetary Fund (IMF) has indicated that it is ready to extend support to Ghana if a request is made for programme support by government.
This was in response to an e-mail sent to the Fund over calls for government to subscribe to an IMF programme to help stabilise the economy.
“As always, the IMF stands ready to support Ghana in any way deemed useful by the authorities,” parts of the mail read.
However, it disclosed that “The Ghanaian authorities have not requested for a programme with the IMF.”
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The Fund further indicated that throughout the Covid-19 pandemic, the IMF has maintained a close policy and technical assistance dialogue with the authorities.
It also comes amidst government’s intention to introduce an Electronic Transaction Levy (E-levy) where a 1.75% charge will be deducted from every transaction above GH¢100.
However, opposers of the tax policy have called for Ghana to subscribe to an IMF programme to deal with the current revenue challenges and investor concerns about the economy.
Some economists have argued the move is the solution needed to “fully restore” investor confidence and deal with the challenges of revenue mobilization.
Some analysts have also cited the recent investor exit of “Ghana’s Bonds” as another clear example or reason why an IMF programme is needed for Ghana.
Government, on the other hand, has “pushed back” these calls, insisting it has what it takes to manage the economy and deal with the current challenges.
Several Ministers engaged by the media have indicated that if the current revenue measures outlined in the 2022 Budget is firmly implemented, that will help to quickly turn things around and firmly stabilize the economy.
On Wednesday, the Deputy Energy Minister, Andrew Agyapa Mercer at a town hall meeting stated firmly that an IMF programme is not on the table.
“We’ve been to the IMF before, so we already know their recommendations. You’ll be told to cut public sector expenditure, social investment will be reduced, any money given to you will be debt added to your money and you would have to pay for it.
“So since we know all these, we can initiate the policies internally to raise revenue in-house and it’s something government should consider,” he noted.
From the email, it’s clear that, unless a formal request is made, the Fund will not go out of its way to force the government to subscribe to an IMF programme.
There have been instances in the past where the country’s development partners and investors had pushed for the country to subscribe to an IMF programme.
