GHANA CAN SURVIVE WITHOUT IMF – CHRISTINE LAGARDE
ACCRA, The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, said that Ghana has the potential to run an effective economy devoid of an IMF programme.
Ahead of Ghana’s exit from the IMF programme by the close of 2018, the IMF Chief is on an official visit to hold bilateral talks with the managers of the Ghanaian economy.
Speaking at a forum in Accra, Lagarde said: You know your country better than I do, it seems to me on the face of it, particularly if the resolve that I have heard from the president, from the vice-president, from the Finance Minister, from the Governor, if there is that resolve to actually stay the course and maintain that fiscal discipline, I think the country has everything it takes to do without an IMF programme.
She told a gathering of government agencies, personnel from the central bank, private sector, think tanks, civil society, NGOs and the academia that she very much hopes that there would not be these external shocks, whether it is sharp and durable drop in commodity prices or massive increases in tensions that could hamper any trade. I hope that doesn’t happen because if it did, then clearly not just Ghana but quite a few countries would need our help and we stand ready.
She continued: We need to be ready and available for that. I think in addition to political maturity, I think that fiscal responsibility can be developed and it requires buying and it requires explaining, but I think it’s in the seeds of the tree that you are nurturing.
Ghana entered into an External Credit Facility with the IMF for economic help in 2015 with funding support of $918 million.
The governing New Patriotic Party (NPP) has, however, announced that it will be moving away from such deals with the IMF.
Earlier at a meeting with Lagarde, President Nana Addo Dankwa Akufo-Addo assured the IMF that Ghana would not engage in reckless borrowing and economic indiscipline that created the situation where the country had to resort to a bail out from the fund in the past.
He said the government would continue with the prudent economic management, adding that a fiscal rule was being worked on to outlaw any attempt to generate fiscal deficit in excess of five per cent in each year, while a fiscal responsibility advisory council would be set up to ensure that the economic gains made so far did not go waste.
The President gave the assurance when the Managing Director of the IMF, Lagarde, paid a courtesy call on him at the Jubilee House.
He discounted assertions that after the IMF programme, the government would embark on huge borrowing as untrue and assured the fund that he would not allow the country to go back to where the economy was which compelled it to resort to an extended credit facility from the IMF.
We don’t want to go back; we want to discipline ourselves so that the economy could grow, he added.
Akufo-Addo said discipline in the management of public funds so far pursued by the government had allowed it to reduce the deficit from 9.3 per cent in 2016 to 5.9 per cent in 2017, while it was anticipated that the deficit would reduce further to 4.5 by the end of the year.
Source: NAM NEWS NETWORK