As Ghana prepares to wind up its thee year Extended Credit Facility fiscal support program with the International Monetary Fund (IMF), experts have been expressing mixed feelings here about the overall impact of the country’s relationship with the international credit institution.
Prof. Godfred Alufar Bokpin senior lecturer from the University of Ghana Business School (UGBS) described the success of the programs the country had had with IMF as modest in the face of daunting challenges.
“No we have made some progress but it is not sustainable, so when the shocks arise we are vulnerable. It is as simple as that. It is so susceptible to shocks. External shocks, internal shocks, we have no in-built stabilizers to withstand those commodity shocks the professor of finance observed.
Ghana has been to the IMF 16 times for a bail-out since independence and the lecturer observed that looking at the term-sheet that Dr. Kwame Nkrumah submitted for the first IMF program-, the reasons then cited were not substantially different from the reason we cited in 2014.
“When we have done well, it is more of the same-raw materials, so anything that happens to commodity prices what happens to the country?” Bokpin added.
One of the main reasons Ghana entered into the current program was to ensure the stability of the local currency, which had been on a run of depreciation due to budget over-runs, public sector debt and collapse of commodity prices on the world stage. But the trend seems to be re-emerging.
Currently the local cedi currency is experiencing some instability and the university teacher attributed this largely to external developments-with the normalization of monetary policy in the US and the fact that investors were seeking early redemption of their investments in Ghana government securities..
According to him; “Our market is not deep, the breadth is also not that wide, so a small request as small as 20 million dollars can change the value of the cedi at a time. So it tells you the resilience of the economy to all these things.”
Civil Society Organizations (CSOs) and think tanks which had been engaging with the IMF on Ghana’s program held a forum here on Thursday to assess the impact of the program.
Franklin Cudjoe President of policy think tank, Imani Ghana said the country’s capacity to manage its economy in the absence of an IMF program, as well as develop beyond aid was hinged on how prudently resources were managed.
Ghana can do it if it remained resolute and disciplined in how it managed critical resources and ensured transparency in contracting.
“But I think once we have institutions that are interested in transparency of contracts in the process of contracting I am sure we will make headway. But as we speak right now, I am losing hope,” Cudjoe added. Enditem