Source: The Republic
The opposition New Patriotic Party (NPP) has been thrown into a state of panic following last Friday’s approval by the International Monetary Fund (IMF) Board an amount of US$918 million for Ghana’s debt sustainability and macroeconomic stability.
Key communications executives of the NPP have been forced to quickly change their argument that the much-talked about IMF program was not likely to materialize. When the argument was defeated by the Friday announcement by IMF that the deal has been finally sealed, NPP agents were in a flurry on social media, spreading fears that the IMF facility would bring on more hardships to Ghanaians.
“You create a mess and run out to look for help in the form of a loan that you will have to pay back with stringent measures and you want the people to clap for you. People let’s prepare for more hardships,” Curtis Perry Okudjeto, a deputy communications director of the NPP wrote his Facebook wall.
The Republic newspaper had gathered from sources that the NPP is afraid that the economic transformation that the IMF program will bring will dampen the prospects of the main opposition party in the 2016 presidential election.
The NPP in a bid to garner public anger against the NDC administration had capitalized on the economic challenges to proffer doom on the economy, saying the NPP was the only solution to reversing the situation.
The entire party machinery had ‘blindly’ depended on the analysis made recently by Dr. Mahamudu Bawumia-their economic guru-, in their conviction that the IMF bailout was going to stall due to what Dr. Bawumia alleged as dubious figures.
Indeed, Dr. Bawumia, the NPP’s economic guru and vice presidential candidate had erroneously predicted the failure of the IMF bailout after outlining a number of claims including the fact that the John Mahama administration was deliberately feeding the IMF with ‘cooked’ figures to secure the multi-million bailout.
His claims have since been rubbished by experts from the Finance and Economic Planning Ministry after it was discovered that while delivering the recent controversial public lecture on the topic at the Central University College (CUC), he had depended on a flawed set of figures to conduct his analysis.
Dr. Bawumia, a former Deputy Governor of the Bank of Ghana-turned politician, has been criticized for conveniently ‘Cherry-picking’ economic analysis to misinform the public and to give the National Democratic Congress (NDC) a bad name in the guise of economic analysis.
This is not the first time he is facing public bashing for his misinformation, he has often been condemned for virtually turning every academic and economic presentation into a political platform where he always presents a saintly picture of the erstwhile NPP administration in comparison to the current National Democratic Congress (NDC) administration.
Meanwhile, the Ministry of Finance has emphasized the importance of the IMF program, saying that it was aligned to Ghana’s homegrown policies to “foster a return to high growth and job creation while protecting social spending.”
Since 2012, the Ghanaian economy have come under severe stress due to both global and domestic factors, resulting in high fiscal and current account deficits.
“To address these macroeconomic imbalances the government since 2013 and subsequently through its 2014 Home-Grown Policy Programme, adopted ambitious and comprehensive stabilization and reform programmes as noted. Although these measures helped to improve the situation, new and continuing adverse global and domestic developments continue to pose challenges to economic management. Prices of Ghana’s key commodities, especially gold and cocoa declined, giving rise to a worsened external sector performance and rapid depreciation of the currency,” Finance Minister Seth Terkper stated in a press statement released on April 3, 2015.
According to the Finance Minister, Ghana’s natural gas supply deals with neighbouring countries to stabilize the effects caused to the energy sector by the financial distress of the country further disrupted the energy sector which has a significant impact on the economy.
“Therefore, as part of measures to address the current macroeconomic challenges and safeguard the bright medium term prospects, Government decided to sign on to an IMF program. After announcing this intention, Government formally requested for an Economic Program with the Fund on Friday, 8th August, 2014. The IMF responded positively and expressed its readiness to help Ghana address the macroeconomic challenges,” the finance minister stated.
He confirmed that before the IMF Executive Board gave its approval, it conducted extensive fielding missions to Ghana to confirm the real situation on the ground and to discuss with government on plans to reverse the adverse economic effects.
” In total, 4 rounds of negotiations were held with the Fund with additional discussions via video conferences and exchange of emails. Earlier this year, the Government reached a Staff-level agreement with the Fund,” Mr. Terkper explained.
At the conclusion of the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair, stated confirmed the explanations that the IMF and Ghana had been working hand-in-hand on the program all along, “The new ECF-supported program, anchored on Ghana’s Shared Growth and Development Agenda, aims at strengthening reforms to restore macroeconomic stability and sustain higher growth,” he stated.
“The main objectives of the program are to achieve a sizeable and front-loaded fiscal adjustment while protecting priority spending, strengthen monetary policy by eliminating fiscal dominance, rebuild external buffers, and safeguard financial sector stability,” Mr. Zhu explained.