Ghana needs a sound, sustainable programme; not a fast-tracked one – Terkper tells IMF Africa Director
Former Minister for Finance, Seth Terkper, has reacted to a statement by Abebe Selassie, Head of the African Department of the IMF, that the Fund will fast-track processes to secure an economic programme for Ghana.
Mr Selassie made the assertion during a press briefing in Washington DC held on the sidelines of the Annual IMF/World Bank meetings.
Similar statements have been made by the Managing Director of the IMF, Kristalina Georgieva.
But according to the former Finance Minister, Ghana needs a sound and sustainable economic programme and not one fast-tracked which might not have been thought through.
Mr Terkper is of the view that a fast-tracked economic programme that is not sound and sustainable will further worsen the country’s economic situation.
However, a sound and sustainable economic programme will restore policy credibility and ultimately restore market access to the Eurobond market.
Ghana is before the IMF for $3 billion to help the country navigate through the hostile economic crisis it finds itself in as a result of the adverse effects of the deadly coronavirus pandemic and the ongoing conflict between Russia and Ukraine.
According to Mr Terkper, failure on the part of government to secure the IMF programme will culminate in the country defaulting on its debt obligations.
“Getting a programme is a must, lest things decline. It is best [for things] to be unpalatable, than disastrous,” Mr Terkper stated.
“We’ll fast track economic support for Ghana – says IMF Africa boss
The International Monetary Fund (IMF) has assured that it will fast track processes with the Government of Ghana to provide support for the country through an economic programme.
The Head of the African Department, Abebe Selassie announced this during the release of the African Economic Outlook Report in Washington DC on the sidelines of the Annual IMF/World Bank meetings.
Reiterating IMF’s commitment to working with Ghana, Mr. Selassie stated that the Fund put together a mission immediately after Ghana made a request for support.
“I can tell that we are doing our best, and will do our utmost to ensure that we can provide support for Ghana as quickly as possible”, he said.
“We will do our best to avoid any delays when it comes to Ghana’s programme”, he added.
Ghana’s debt issues and possible restructuring
Mr. Selassie stated that an important part of the IMF engagement with Ghana will be providing funding to help the country.
He, however added that there are conditionalities which may require a country to restructure its debt if it reaches unsustainable levels.
Providing some details, Mr. Selassie explained that part of the work ongoing with Ghana is to assess Ghana’s debt situation through the Debt Sustainability Analysis.
He noted that the funding, will come with some very important reforms that should be undertaken by the government.
Possible conditions for Ghana
Mr. Selassie pointed out that Ghana will have to take the lead, to receive responses and support from the IMF.
“Government of Ghana has also shared its key reform plans with the IMF on the proposed economic programme for financial support”, Mr. Selassie disclosed.
“We have now agreed on a road map on the Government of Ghana’s key reform plans on how things should happen going forward”, he added.
Mr. Selassie stated that both parties are making good progress on the Economic Programme for Ghana.
