Michael Harry Yamson, Managing Partner at Ishmael Yamson and Associates, worries that Ghana’s economic problems may get worse even if the government receives its 18th extended credit facility from the International Monetary Fund (IMF).
He believes that in order to increase macroeconomic stability, the government needs to show more fiscal and political restraint.
According to Mr. Yamson, until the numerous structural, revenue mobilisation, and public financial management issues are resolved, Ghana won’t be in a position to effectively utilise the US$ 3 billion bailout being sought from the IMF.
If we are willing to accept the bailout and use the money for good, it will signify something. So what about the way the public sector squanders money has changed? Do you know of any cuts to spending that have been announced? Nothing; even if we receive that relief, it won’t matter. All it will do is arrive and sit in a basket. We should at least be aware that this will only serve to give us a false sense of assurance. 3 billion dollars are a waste.
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The assurance of finance from foreign creditors is the only requirement left, according to the IMF, for Ghana’s programme request to be accepted by the executive board. All other requirements have been met.
Once Ghana receives the finance certainty, the organisation has promised that its staff will quickly present the program request to the executive board for approval.
Ken Ofori-Atta, Ghana’s finance minister, also revealed that the IMF Board is likely to approve a $3 billion bailout for the country’s economic recovery by the end of May 2023.
Michael Harry Yamson, though, is still doubtful.
He said, “The only thing we brought to Washington was three tax incentives, but everyone knows those taxes would have a chilling effect on the private sector, so where will the growth come from to power the public purse so government will have room to go and do development?
Ghana was successful in obtaining a staff-level agreement (SLA) for the $3 billion request in December 2022, but progress towards the finish line has been slowed by disagreements between the bilateral creditors about the specifics of the debt restructuring process.
