IMF BAIL-OUT IS HURTING

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Tuesday, August 12, 2014

Dr. Kobena Arthur Kennedy a member of the opposition New Patriotic Party (NPP) says it disheartening to see the John Dramani Mahama-led government run to the IMF for a bail-out after the country worked hard to get out of the same condition.

The NPP member who has become one of the fiery critics of his own party said the decision by the National Democratic Congress (NDC) government to turn to the Breton Woods institution hurts more because Ghana now produces oil.

“If we were doing so well just before we struck the oil, why are we floundering once again? — despite having oil,” Dr. Arthur Kennedy said in a statement issued from his Irmo base in South Carolina, United States yesterday.

“Unfortunately, we have been here before. The IMF was around just before the Busia government was toppled by the ‘Yentua Acheampong government’. It was around just before Rawlings came again on the strength of ‘corruption and economic mismanagement’. It assisted the [Provisional National Defence Council] PNDC regime and hailed Ghana as an ‘economic miracle’. It assisted NDC-1 and the Kufuor administrations".

“Indeed, with the latter, we went on to issue the first Eurobond by an African country after South Africa. With each of these bail-outs and the hailing of ‘successes and miracles’, reasonable people had assumed that we had turned the economic corner for good—only to find ourselves in the same soup again. 

This particular one hurts especially because we have oil,” he said.

According to Dr Arthur Kennedy with the repeated cycles of bailing-out by the IMF, there was the need to seek what he called ‘some hard questions’ and find lasting solutions to such problems.

“First, why do we keep needing help from the IMF? Second, is this present request for help meant to get more loans or to get policy advice—otherwise known as “apo” or knowledge? If public sector wages are this high, was ‘Single-spine’ a mistake?” he asked.

He added: “Do our governments find it hard to accept advice from the opposition? Are we going to the IMF to listen to the same advice that has been offered by Bawumia, Akoto-Osei and others? If that is the case, why is the opposition applauding the request to the IMF instead of challenging the government to do what it must do?”

He held that if the request to the IMF was for financial help then Ghanaians reserved the right to ask what had happened to all the money that has been borrowed since the NDC returned to power in 2009.

“Should we have been more welcoming of Archbishop Duncan Williams’ offer of prayers? While all these are important questions, the biggest question is whether we are indeed here because of mismanagement and/or corruption,” he added.

The renowned ECONOMIST magazine published that “Recently, Ghana has been living beyond its means. Public debt is rising rapidly and now tops 50% of GDP in official figures. Fitch, a ratings agency puts it at even higher: 62%, taking into account a revaluation of its foreign-denominated debt. The main cause is a yawning fiscal deficit which stood at 10.1% in 2013.”

Confusing the public

The NDC government has been giving conflicting signals about the proposed deal with the IMF.

President Mahama before emplaning to the United States to attend the special African/American Leaders Summit is reported to have instructed his economic team to start the processes that would lead to a bail-out from the IMF, a move the fund has even confirmed.