Dr Adu Owusu Sarkodie, a senior lecturer in the Department of Economics at the University of Ghana, has suggested to the Government of Ghana to return to the International Monetary Fund (IMF) for financial support.
However, Dr Sarkodie said that the decision on whether or not to return to the IMF will depend, among other things, on the government’s ability or otherwise to borrow from multilateral institutions, pass the E-Levy Bill and reverse the new benchmark value and road toll policies.
His comments come after the international ratings agency Fitch downgraded Ghana’s long-term foreign-currency issuer default rating (IDR) to B- from B with a negative outlook.
Speaking to Kwaku Nhyira-Addo on The Asaase Breakfast Show on Monday (17 January), Sarkodie said going back to the IMF will give the government the required policy credibility.
“My final and most bitter option is to seek an International Monetary Fund programme. This is not something I want. I have never wanted an IMF programme for this country. In all my submissions, I haven’t been impressed with Ghana going to the IMF.
“But any time we have gone to the IMF, there was the need for it. We mess up and we get ourselves into the situation where there is no way out except to seek a IMF programme. It is my third option and it is a bitter one.”
Sarkodie added: “We have to seek the IMF programme for policy credibility before they can lend you the money. It is a fact that if the investors do not trust you, the way out is to go to the IMF and seek policy credibility before they can lend you the money credibility.
“And in that, Ghanaians should remember that it comes with conditions, because the IMF will make sure they discipline you to do one or two things to bring the fiscal position back on track,” he said.
GhanaFeed.com
