Government justifies decision to extend IMF deal

| Updated Aug 31, 2017 at 4:51pm



Government has justified its decision to agree to a one year extension of its programme with the IMF.

Deputy Finance Minister, Kweku Kwarteng said the previous administration managed the economy badly and it will not be prudent to pull out of the IMF programme at this moment.

He explained that the Fund had threatened to pull out immediately if government was not committed to seeing through arrangement up to the end of next year instead of April.

He said government would have been more measured in its earlier comments, if it had known the thinking of the IMF on the issue.

Meanwhile, the Minority has accused government of double standards for agreeing to extend the IMF Programme.

MP for Bolga Central and Deputy Ranking Member on Finance, Isaac Adongo said the latest decision of the government is yet another demonstration of how dishonest the government is.

He wonders why having bastardised the IMF and the programme, the new administration will seek to continue with it.

He said despite not meeting the targets, the current government should have opted out of the programme, since members of the administration claimed in the past that Ghana does not need the assistance of the IMF in managing the economy.

In a related development, a Senior Lecturer at the University of Ghana Business School, Dr. Laud Mensah, says it is not surprising that Ghana's Extended Credit Facility arrangement with the IMF has been extended by one year.

The extension comes despite assurances from President Akufo Addo and the Finance Ministry that government will not extend the programme.

But Dr. Mensah said most of the targets have not been met hence the need to extend the programme.

The International Monetary Fund (IMF) has approved an extension of a $918 million aid package for Ghana for an extra year beyond its original April 2018 end date.

The decision was taken during a meeting of the Fund’s executive board that also approved a $94.2 million in balance of payment support following the fourth review of the programme.

This was contained in a statement issued by the IMF.

Ghana signed onto the programme in April 2015 hoping to restore fiscal balance to an economy dogged by budget deficits, rising public debt and inflation.

The review had been delayed because President Akufo-Addo opened new negotiations with the IMF aimed at getting the programme back on track after it suffered significant setbacks last year.

The IMF called for additional efforts to address revenue shortfalls and full enforcement of expenditure control measures to contain spending and prevent the recurrence of domestic arrears.

It also asked Ghana to tackle energy sector inefficiencies, particularly improving the management of the state-owned enterprises.