Claims that ‘half the world’ has gone to the IMF untrue – Bright Simons
Honorary Vice President of policy think tank, Imani Africa, Bright Simmons, has dismissed claims that half the world is seeking an IMF bailout to restore confidence in their economy.
According to him such claims are unfounded.
“We have followed the debate quite closely and in the course of doing that some of the over politicisation of the debate continues to prevent a very thorough understanding of this IMF decision.
“The argument that some government spokespersons have made [to the effect that half the world has gone to the IMF] in order to confuse the debate does not hold,” he said during an interview on Newsfile on July 9, 2022.
He explained that given the various programmes under the IMF, it is “inaccurate” to say that half the world is seeking an IMF bailout.
“If you look at the programme, there are programmes like the Standby Agreement, Standby Credit facility, etc which are designed for economies that are doing relatively well but they have some short term, temporary problems and there is the second one called the credit facility which deals with protracted challenges.
“The distinction between the programmes is very important because we’ve heard lots of people make the point that a lot of countries have gone to the IMF without understanding what kind of programmes the IMF offer and the argument that half the world has gone to the IMF so it’s just a routine does not hold.”
He explained that such comment suggests that the problems the country is facing is temporary and will go away within a short period.
“That portrayal of things is not very accurate,” he stressed.
According to him, contrary to arguments that have been made, only 41 countries are actively on IMF programmes.
“Remember what happened in 2020 and 2021 where the IMF went to its board and allowed everybody in the world to come for money without having to undergo a programme or meet any specific conditions, that’s not a bailout. So to use that as basis to say that a lot of countries went for money, including Ghana, to persist that half the world has gone for an IMF bailout is just completely inaccurate,” he maintained.
His comment follows the government’s decision to seek an IMF bailout.
A statement signed by the Information Minister, Kojo Oppong Nkrumah, indicated that there had already been a conversation between the IMF boss, Kristalina Georgieva and President Akufo-Addo conveying government’s decision to engage the Fund.
“The President of the Republic, Nana Addo-Dankwa Akufo-Addo, has authorised Finance Minister, Ken Ofori-Atta, to commence formal engagements with the International Monetary Fund (IMF), inviting the Fund to support an economic programme put together by the Government of Ghana.”
Cabinet at a meeting on June 30, 2022, supported government’s decision to pursue an economic programme from the Fund.
The engagement with the IMF, the statement pointed out, will seek to provide a balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the COVID-19 pandemic and, recently, the Russian-Ukraine crisis.
