The IMF Board Approval — There is more work to do
There was a bit of good news and reason to celebrate the IMF Executive Board’s approval of the first review of the country’s extended facility agreement - thus paving the way for the country to draw down on another US$600 million budgetary support from the Bretton Wood institution.
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Good news because it has been long in coming and also the country needed the US$ 600 million badly to support the budget. Any delay beyond this point could have had some impact on the fragile economy.
As we celebrate, however, there is also the outstanding last leg of the country’s external debt with our bilateral creditors yet to be concluded.
The finance minister has expressed optimism about concluding that discussion by the end of next month. That should bring closure to this long and tortuous debt restructuring programme and position the economy in a healthy state.
In its presser, the IMF indicated that the government’s reforms were in line with expectations as all the macro-economic targets were responding to policy directions. Inflation was trending down, so were the fiscal and external environment positions improving.
Truth be told, Ghanaians have had to endure the huge cost of the government’s debt restructuring efforts over the past two years. Granted that events leading to the current economic situation was, in part, driven by global events, a large part of it, however, we dare to say, was self-driven.
Why do we say this? We have known for years now that importing everything is our Achilles heel among many other pressing issues. Yet we have failed to take the bold decisions that will take us out of this conundrum.
Graphic Business believes that the sacrifices that every Ghanaian is currently going through to ensure that the economy doesn’t collapse should not be taken for granted at all.
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It is within this context that we share the opinion of many that if governments are elected to serve our interest and represent us, then our opinions and views which aim to further enhance good governance and advance cause of democratic governance must be factored into policy decisions.
That, all efforts must be made to ensure that the costly mistakes made in the past are not repeated into the future. Graphic Business, therefore is suggesting a few ideas. These are not new. Except in our current economic situation, we need to seize the moment to make structural changes to the economy.
Again, we must take a critical look at our current exposure to the international market and what the underlining issues are. This is to ensure that going forward we do not borrow (whether domestic of international) at cut-throat interest rates. That will, however, mean getting the fundamentals right. Therefore, we must take the decisions that will start to correct the market and bring interest rates on government debts to single digits. At our current infrastructure deficit of about US$15 billion, we can only close the gap by borrowing. However, the question remains, at what price?
Then, there is the issue about inflated contracts. It is reported for instance, that a kilometre of asphalt roads in Ghana is among the highest in the sub-region if not in Africa. There is the need to re-look at the nature of procuring government contracts that deliver value for money.
Reforms are badly needed to create an environment where the private sector thrives as we straddle along the road to economic greatness.
Word on the street is that Ghanaians have had enough of the political rhetoric that only profess to solve our economic challenges but in the end proves to rather compound our economic woes if recent economic statistics are anything to by.
We all owe it as a collective duty to bring back the confidence in the economy. It is however, incumbent on our leaders to show the way by demonstrating ideas that will change our fortunes for the better.