The Minority National Democratic (NDC) in Ghana’s Parliament is predicting tough times ahead for Ghanaians as the International Monetary Fund (IMF) approves the US$3bn bailout to the country.
The Executive Board of the Fund gave the approval and was formally announced during a the joint press conference by the IMF and officials of the Ministry of Finance after a long-await to help the country address its worsening economic conditions.
As part of the arrangement, an immediate US $600 million will be released to Ghana according to statement issued by the Fund following its executive board meeting whiles the remaining will be staggered over the next three year period.
Reacting to the IMF announcement in a press statement signed by the Minority Leader, Dr.Cassiel Ato Forson, the minority caucus predicted harsh consequences on the Ghanaian populace due to unfavourable conditionalities that would accompany the deal.
“Let us brace ourselves for the full consequences of this IMF deal, which will without doubt bite hard on Ghanaians, especially the youth. This is not a counsel of despair, but a reality that will soon dawn on all of us.”
The minority also indicated that the public would be looking for the Board document on the true state of Ghana’s economy in the coming days.
According to the Minority Leader, the document will outline the full details of the bargain between the Fund and the Akufo-Addo/Bawumia NPP government in terms of Debt Sustainability Analysis, Performance Criteria, Structural Benchmarks and the gamut of other conditionalities that have been agreed upon.
Dr Ato Forson disclosed that the minority in the coming days will address the nation on the contents of the report and what the IMF deal portends for the country going forward.
The press statement also commended the tolerance of Ghanaian bondholders who have taken haircuts on their investment and returns, the pensioners who have so far been denied payment of maturing coupons on their investments and the entire citizens, both young and old, who have so far endured various painful sacrifices such as turbulent economy, rising cost of living and anxiety over how to afford the basic necessities of life.
The minority leader recalled the many advises it offered government since 2021 to seek an IMF bailout at the time and observed that things would not have been critically dire as it is now but government ignored all good counsel.
The $3 billion bailout facility to support the debt-ridden nation’s recovery efforts will be disbursed over three years, the second tranche of $600 million is expected in November/December this year all things being equal.
Ghana has been struggling to recover from external shocks including the twin effects of the global COVID-19 pandemic and the Russian-Ukraine war which impacted fuel prices premised on preexisting fiscal and debt vulnerabilities.
Even though Ghana is the world’s second largest producer of cocoa and the leading producer of gold in Africa, the country is import dependent and does not earn much through exports to balance its imports.
The IMF facility is therefore designed to partly help deal with this balance of payments deficit and to help slow inflation rate and stabilize the local currency in anticipation of cushioning citizens through stable prices of goods and services.
Analysts however believe the deal has come with its attendant insensitive conditions such as increase prizes in utility bills and a total freeze on public sector employment among others since government cannot could not discipline itself.
By: Christian Kpesese