A Professor at the University of Ghana Business School, Lord Mensah has told the government to have another strategy to rely on in the event that the country misses out on closing the deal with the International Monetary Fund (IMF) by end of March this year.
He explained that in matters of this nature where there is uncertainty, what an economy manager should do is to develop another plan to cater for the situation where the deal does not happen within the expected period.
Speaking to TV3 on Monday, March 13, he said “Talking about not getting an IMF deal by end of March having a serious impact on the economy, I think that there should be a plan B. If we don’t get the IMF deal by end of March you should have a plan B as an economic manager.
“So for me, there should be a Plan B building up which I know very well that they may also consider. Maybe having an engagement with the Americans, taking advantage of the geopolitical conditions, and ensuring that at least we get support from the country to keep us afloat until we get a deal. For me we shouldn’t rush it we may have to look at the timing, at what point do you want t get an IMF deal?”
It is recalled that Finance Minister Ken Ofori-Atta said the economy would crash if Ghana does not get an IMF deal by end of March.
Addressing Pensioner bondholders who have resisted their inclusion in a domestic debt exchange programme on Monday, February 6, he said “We really feel that government has listened, there is humanity to us, we are protecting the destitute, widows and the orphans and the older people who have worked for this nation. We are in a crisis, we cannot put our heads under the sun and pretend that we are not.
“We need to be mindful that we really need to be successful in going to the fund by this March to avoid what we all experienced last year which we all don’t want to experience again.”
Recently, President Nana Addo Dankwa Akufo-Addo expressed optimism that the deal that Ghana is seeking to close with the IMF will go to the board for approval by end of this month, March 2023.
Ghana has already reached a staff-level agreement with the Fund on the deal.
The Managing Director of the Fund, Kristalina Georgieva had said she was happy Ghana was making progress in bringing the staff-level agreement to the Board.
She said the IMF supports Ghana’s efforts to stabilize the economy and promote an inclusive recovery.
In a tweet, she said “Wonderful to meet President @NAkufoAddo at #MSC2023. Very pleased to hear authorities are making progress on bringing the staff-level agreement to the IMF Exec. Board. We support Ghana’s efforts to stabilize the economy & promote an inclusive recovery.”
Wonderful to meet ??President @NAkufoAddo at #MSC2023. Very pleased to hear authorities are making progress on bringing the staff-level agreement to the IMF Exec. Board. We support Ghana’s efforts to stabilize the economy & promote an inclusive recovery. https://t.co/rwrsTIPEoF pic.twitter.com/0E5Ir4HmqU
— Kristalina Georgieva (@KGeorgieva) February 17, 2023
The staff-level agreement with Ghana is for a three-year programme supported by an arrangement under the Extended Credit Facility (ECF) of about $3 billion.
The approval by IMF management and the Executive Board in the period ahead is contingent on receiving financing assurances from Ghana’s partners and creditors, the IMF Boss said while answering questions in Frequently asked questions on Ghana.
The goal of the government’s economic program is to restore macroeconomic stability and debt sustainability while protecting the vulnerable, preserve financial stability, and laying the foundation for strong and inclusive recovery.
To support the objective of restoring public debt sustainability, the authorities have launched a comprehensive debt operation.
When concluded, the President said, will set the stage for the strong recovery of Ghana’s economy.
Speaking to members of the Diplomatic Corps especially from the Paris Club, at the Peduase Lodge on Tuesday, February 28, President Akufo-Addo said “Just as we managed to achieve a staff-level agreement with the Fund in record time in December last year whose terms were systematically fulfilling including the difficult but ultimately highly successful process of the Domestic Debt Exchange Programme, I am confident that with the cooperation we have received from the members of the Paris Club and the People’s Republic of China, which sent a delegation from China’s EXIM Bank to Accra over the weekend to meet with officials of the Ministry of Finance, we shall be able to go to the Board of the Fund to conclude finally the agreement by the end of March.”
“This will set the stage for the strong recovery of Ghana’s economy. Needless to say, we will hope that all Ghana’s friends will weigh in with words of support at the Fund,” he added.
Addressing Pensioner bondholders who have resisted their inclusion in a domestic debt exchange programme on Monday, February 6, the Finance Minister pleaded with the pensioners to accept a 3.5% cut and accept the new terms of 15% coupon rate and 5% maturity.
“We really feel that government has listened, there is humanity to us, we are protecting the destitute, widows and the orphans and the older people who have worked for this nation. We are in a crisis, we cannot put our heads under the sun and pretend that we are not.
“We need to be mindful that we really need to be successful in going to the fund by this March to avoid what we all experienced last year which we all don’t want to experience again.”
By Laud Nartey|3news.com|Ghana