Government Spokesperson on Governance and Security Palgrave Boakye-Danquah , is sure that Ghana would successfully complete the IMF program and emerge from it even stronger than it did from the previous 17 programs.
He claimed that the government was drastically altering systems through digitalization, which would change the way the economy was structured.
As a result, “With enhanced fiscal discipline and structural reforms to restore debt sustainability and growth, we should emerge stronger than we have with the previous 17 IMF programmes,” he told Accra-based Metro TV.
WHY IMF?
According to Palgrave Boakye-Danquah, Ghana “has been hit by a quadruple whammy in the last few years,” hence the country must request assistance from the IMF.
The Energy Sector Excess Capacity Payments, which cost GH$17 billion and are related to the legacy of a take-or-pay contract, the Banking Sector Clean-Up, which cost GH$25 billion, COVID-19, which cost GH$12 billion in 2020 and 2021, and the Russia-Ukraine war were among those he cited.
Palgrave Boakye-Danquah stated that if the fiscal impact of this “quadruple whammy” was removed, “Ghana will not be going to the IMF for support, because our fiscal, debt, and balance of payments outlook would be sustainable.”
He clarified that out of the four variables, two (COVID-19 and the Russia-Ukraine war) were caused by external events, whilst the other two (the cleaning up of the banking system and the excess capacity payments) were brought about by the previous administration’s policies.
DIFFERENCE
After each IMF program, the basic mechanism and structure of the economy remained the same, he noted that Ghana has requested programs from the IMF 17 times since gaining independence.
However, he subtly added that Ghana had a number of issues following each of the 17 IMF programs, including a lack of a national ID card, a broken national digital property address system, the fact that only 30% of adults had bank accounts, and inefficiency, bribery, and bureaucracy at the ports.
He went on to say that following each of the prior IMF programs, the Passport Office, the Driver and Vehicle Licensing Authority (DVLA), the Births and Deaths Registry, the motor insurance database, and the credit scoring by credit reference companies were not digitalized.
Palgrave Boakye-Danquah went on to say that, among other things, less than 4% of the population had tax identity numbers, there were no drones that could carry medical supplies, there was no Universal QR Code Payment System, there was no national-scale E-Pharmacy, and there was no Unified Common Platform for Property Taxation.
IMF Approves $3bn Loan To Ghana
Ghana has finally secured clearance from the International Monetary Fund (IMF) Executive Board for a three-year budget support plan designed to restore macroeconomic stability and debt sustainability after 10 months of deliberations and negotiations.
The government will receive $3 billion through the extended credit facility (ECF), which is also anticipated to promote structural changes and aid in the resuscitation of the economy after two years of difficulties.
IMF Managing Director Kristalina Georgieva said in a statement that the Executive Board’s approval “will enable an immediate disbursement to Ghana equivalent to SDR 451.4 million (about $600 million)”.
