Running to IMF is the only option - Osafo Maafo
Former Finance and Economic Planning Minister, Mr Yaw Osafo Maafo, has said that the government’s decision to seek a bailout from the International Monetary Fund (IMF) was the only option available in the short-term.
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He said it was the good thing to do now as it would help instill administrative discipline in government’s expenditure as a result of the IMF conditionality.
But he warned that the move would bring about a lot more hardships to Ghanaians.
This, according to him, was because the government may no longer be able to take decisions and initiate moves without approval from the IMF.
He said the government would no longer be able to introduce certain subsidies because the IMF, which is a credit reference point, will oppose it, except when the money to take care of those subsidies was readily available.
The former Finance Minister said the IMF was not against subsidies, but the country should be able to afford the subsidies.
Government on Saturday announced the decision to go for an IMF bailout to help save the ailing economy. This comes eight years after Ghana left the programme in 2006.
According to Mr Osafo Maafo, who was Sports Minister in 2006 after serving as Finance Minister, the Kufuor government moved away from the IMF because it realised there was discipline in its finances and the economy was doing well.
Speaking on Oman FM Monday morning, Mr Osafo Maafo said the move to return to the IMF was an admission of the government's incompetence in managing the economy.
He, however, said it was a positive move as it would help instil discipline in government’s finances.
He said due to the poor state of the economy, IMF support was necessary, otherwise, the country would not be able to borrow due to high interest.
Explaining further, Mr Osafo Maafo said If borrowers thought there was a huge risk in lending Ghana money, the interest would be high, but if Ghana was in an IMF programme, they will think that there would be discipline in how the monies would be spent.
He said the Supreme Court’s verdict on some recent judgement debts were indicative that we were not disciplined with our expenditure and we wrongly paid monies to people who had no contracts with the state.
If we can’t impose discipline for ourselves then we need a headmaster (IMF) who would do that for us, he said.
Listen to Osafo Maafo in the attached audio below
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A financial analyst, Sydney Casely Hayford, who also spoke on the programme expressed similar sentiments and said resorting to the IMF was the only option in the short term.
Listen to Sydney Casely Hayford in the attached audio below
{mp3}imf_sydneyhayford|500|30|0{/mp3}
Former Finance and Economic Planning Minister, Mr Yaw Osafo Maafo, has said that the government’s decision to seek a bailout from the International Monetary Fund (IMF) was the only option available in the short-term.
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