Michael Harry Yamson, Managing Partner at Ishmael Yamson and Associates, believes that Ghana’s economic problems may get worse even if the government receives its 18th extended credit facility from the International Monetary Fund (IMF).
He believes that in order to increase macroeconomic stability, the government needs to show more fiscal and political restraint.
Mr. Yamson argues that until the numerous structural, revenue mobilization, and public financial management issues are resolved, Ghana won’t be in a secure position to make the most of the US$ 3 billion rescue it is requesting from the IMF.
“The bailout will be meaningful if we are ready to receive it for good purposes. But what has changed in the way the public sector soaks money? Has any spending cut been announced that you know of? Nothing, if we get that relief, it will mean nothing. It will just come to sit in a basket. At the very least, we should know that this will only come to give us that mirage of confidence. The US$ 3 billion is a waste.”
The assurance of finance from foreign creditors is the only requirement left, according to the IMF, for Ghana’s program request to be accepted by the executive board. All other requirements have been met.
The institution has guaranteed that as soon as Ghana has the finance certainty, its staff would swiftly submit the program request for approval to the executive board.
Ken Ofori-Atta, Ghana’s finance minister, also revealed that the IMF Board is likely to approve a $3 billion bailout for the country’s economic recovery by the end of May 2023.
But Michael Harry Yamson continues to be doubtful.
“The only thing we took to Washington is three tax incentives, but everyone knows those taxes will have a chilling effect on the private sector so where will the growth come from to power the public purse so government will have room to go and do development?” he expressed.
Ghana secured a staff-level agreement (SLA) for the $3 billion request in December 2022 but efforts to move to the final lap have dragged as bilateral creditors haggle over the terms of the debt restructuring exercise.