Demonizing the IMF; Is the IMF a toxic body for Ghanaians?

It appears the mention of International Monetary Fund (IMF) in Ghana creates more divisions among the people of the natural resource-rich West African country than other issues.

Ghanaians and other foreign residents in Ghana have lately been subjected to intense economic lectures in their homes, at the various places of work, in public transports, at the stadia, market places, in churches, bedrooms and boardrooms following the announcement by the Government of Ghana that it was seeking a programme under the Fund.

The announcement on Friday July 1 sharply divided public opinion on whether or not there was the need to go to the IMF for support.
Some are of the view that seeking the support is an admission of failure by the current managers of the economy whereas, others think otherwise.

Government communicators have insisted that the move is to support the economy against external forces including the ongoing Russia-Ukraine warfare as well as the Covid-19.

In fact, the head of the Economic Management team, Vice President Dr Mahamudu Bawumia in an address he delivered at the launch of the Accra Business School IT programme in Accra on Thursday July 14, attributed the decision to go to the Fund to the impact of the Covid and the Ukraine-Russia warfare.

He also did note that the excess power capacity payment and the banking sector clean-up also kept the public debt up, leading to the hardship.

“Following the Russia-Ukraine war, energy and food prices skyrocketed globally. In many advanced economies, inflation reached 30 and 40 year high. Inflation in Ghana has increased 29.8 per cent in June 2022, things were disrupted and shipping cost increased by over 1000 per cent, economic growth slowed down.

“Ladies and gentlemen, we are talking now about a different government, Ghana that is being rapidly transformed.

“The underlying systems are being dramatically changed through digitalization and other policies that will transform the structure of the economy which will enhance fiscal discipline and structural reforms to restore debts sustainability and growth.
“We should emerge stronger than we have from the previous seventeen IMF programme but it will take hard work and difficult decisions,” he said.

However, other observers also fear that the decision to go to the Bretton Woods institution will cost the governing party some votes in the next general elections because the party, when in opposition, kicked against the then John Mahama administration’s decision to head to the Fund.

Bolgatanga Lawmaker, Isaac Adongo asked the team from the IMF to scrutinise the government’s books thoroughly as part of the engagement.

On Thursday July 14, around 7PM, I had a conversation with four persons at the Achimota Retail centre in Accra about this IMF thing.

The views of three of the discussants were that, going to the Fund would lead to several hardships on Ghanaians hence, to them, it is a no, no.

As far as I am concerned , their fears were genuine because what the IMF does is that, it will help clean up the system to tackle the issues leading to the economic hardship, as they also provide financial support.

Some of the measures they may impose include embargo on employment into the public service, among others. This is likely to create hardship in the interim but in the minds of the IMF, it is the necessary bitter pill to take to cure an ailment.

I also explained to them that the IMF is like the last resort where you go to in terms of emergency.

The government’s decision to go there means that the situation is dire, I told my fellow discussants.

After this conversation that I had with them, the question I asked myself was, why is the IMF becoming a demon to Ghanaians?

To answer that question, let us first of all look at the mandate of the IMF.

The mandate of the IMF, as laid out in its Articles of Agreement, is to promote international monetary cooperation, balanced growth of international trade, and a stable system of exchange rates.

Since the late 1970s, some elements of the IMF’s operational policy advice have evolved significantly.

So the IMF is there to help member countries stabilise their systems.

To answer my own question as why the body is becoming a demon to Ghanaians, first of all, the utterances of some officials in this government when they were in opposition at the time the previous Mahama administration went to the Fund is to blame for this anxiety.

Secondly, the utterances of some Ministers of State especially the Finance Minister, Ken Ofori-Atta, who said for the umpteenth time that the Akufo-Addo administration would not go to the Fund because the government had put in place measures to deal with the challenges, is also a factor to blame.

This proposition by Mr Ofori-Atta sunk into the minds of Ghanaians hence, when the U-Turn was made, it came at a great shock to Ghanaians.

Officialdom has a lot of lessons to learn from this episode.

One, they have to be measured in their utterances since they don’t control what the future holds.

Secondly, making emphatic statements or projections should be guided.

The writer, Laud Nartey is a Ghanaian journalist.
Nartey.Laud@yahoo.com