“Long before the government went cap in hand for this current bailout from the IMF, Dr. Bawumia had diagnosed the massive failures in government policy and warned of its consequences,” a statement issued on Thursday, April 16 said.
“He had warned since 2013 that the forex controls put in place to stop the cedis slide were adhoc, artificial and would not work.”
Below is the full statement:
IMF VINDICATES BAWUMIA
The Daily Graphic reported on Wednesday April 15th, 2015 on its interview with Ms. Christine Lagarde, the Managing Director of the International Monetary Fund (IMF).
The report included the IMF Chief’s diagnoses of the NDC government failures that have caused the current economic hardships in the country.
The IMF Chief’s diagnoses include: fiscal indiscipline since 2012, huge deficit spending, reckless borrowing and high debt service, and low spending on investment as against high recurrent spending.
Long before the government went cap in hand for this current bailout from the IMF, Dr. Bawumia had diagnosed the massive failures in government policy and warned of its consequences. He had warned since 2013 that the forex controls put in place to stop the cedis slide were adhoc, artificial and would not work. He has also warned of the dire consequences of government policy, such as the cedi sliding to GHC4 a dollar by July 2014, and the resort to the IMF bailout. He was met with outright condemnations and insults, including a retort by President Mahama that government will continue borrowing as gov’t was not borrowing to buy ‘Kebab’.
In the event, all the consequences that Dr. Bwumia warned about have happened; the cedi reached GH4 by July 2014, the forex measures put in place were ineffective and withdrawn in 2014, and Ghana has sought IMF bailout.
And Wednesday 15th April, Daily Graphic reports, the IMF’s confirmation of all of Dr. Bawumia’s diagnoses of the gov’t failures and its consequences.
It is most sad that when Dr. Bawumia made these diagnoses and gave the helpful warnings, he was pooh-poohed by government. Now that the IMF has given same diagnoses and warnings, the government is willing to go along with them and adhere strictly to the IMF dictates.
An explanation is perhaps given by Dr. Omane Boamah, Communications Minister that the government has better regard for the “superior” technical skills of the IMF and other “Bretton Woods” institutions.
This indeed, is confirmation of the utter helplessness of government.