Report by Nana POKU
An Economist and Professor of Finance at the University of Ghana Business School, Godfred Alufar Bokpin, has suggested that Ghana ‘sells out’ to the International Monetary Fund and the World Bank in the management of its financial affairs.
Speaking at a lecture at the Institute of Economic Affairs (IEA) auditorium in Accra, the senior economic lecturer taunted the government with the assertion that it is about time the country went to IMF for a bailout.
Premising his argument on historical antecedents, the professor stated that Ghana did the same thing by refusing to access financial assistance from the Breton Wood Institute but made a u-turn in 2009 and went there for their financial policy direction.
At the time the government felt that after adopting the HIPC initiative it had enough fiscal space to bluff the IMF.
“But it was just an empty bluff. Since the inception of our self-rule, Ghana has sought the support of the financial hub countless times. We started in 1965 though abortive because Nkrumah shot it down, but accessed the facility in 1967 under NLC military junta,” he said.
“Professor Bopkin intimated that Ghana has been patronizing the services of IMF on sixteen previous occasions. (See our Editorial for our reaction)
“On average, every four years, we go there for a bailout,” he said.
He further stated that at the moment Ghana is at the crossroads in her current economic melting nature. He stated that with the Covid 19 pandemic and the ongoing Russia/Ukraine war, the country is facing a fragile economic order and something needs to be done to save the situation before things get out of hand.
“At the moment, inflation is at 17.5%, far above the figure in 2016 at 15.4 %. The fundamentals are weak. Interest rate, depreciation of the cedi, balance of payment deficit, low tax collections, high expenditures, leakages in the revenue collection, price wars, low productivity, etc. These and other fiscal bottlenecks have militated against the economy pushing it to seek respite in the Breton Wood Institute albeit its biting conditions,” he asserted.
Even though he accepted the measures the Finance Minister proposed recently to address the economic malice, he argued that alone cannot re-situate the volatile economy of the country.
He claimed that the injection of 2 billion dollars into the economy is a knee-jerk approach that cannot sustain the economy.
Professor Bopkin lamented that a country that inherited a legacy of 295 million pounds from the British government at our independence ended up owing over 500 million dollars in debts in 1965 and since then the country has been borrowing in leaps and bounds.
“Today as l speak our debts stock is 351 billion GH cedis, (7.1b) dollars,” he said.
He stressed that if Ghana goes to the Institute for financial advice, fiscal discipline, support, fiscal balance and prudent use of our income would create a breathing space.
He postulated that since 1960, Ghana has never got its economic fundamentals right, and structurally, our economy is spoon-fed by other countries that need to be addressed as soon as practicable.
“We need to employ austere and tight economic and fiscal policies and programs to strengthen our revenue collection machinery, reduce frivolous expenditures, expand our tax regime through direct taxes, encourage exportation and manufacturing, reduce imports, stop all leakages in the system before the economy can bounce back,” he said.
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