The Industrial and Commercial Workers Union (ICU) has asked government to provide details of its announced extension of the country’s programme with the International Monetary Fund (IMF).
According to the Union, Ghanaians should be told the full details of the programme, “why we went for it, the length of the extension and the new policies that are likely to feature.”
General Secretary of the ICU, Mr Solomon Kotei wondered “What does the extension seek to do? will the programme now allow our teachers and nurses to gain employment? Are we going to add more loans to what we have already taken?”
Ghana’s three-year programme with the Bretton Woods Institution which began in April 2015, was expected to end by April 2018 but challenges in meeting programme targets have forced the scheduled reviews forward, a development that has affected the completion date for the programme.
The fourth review of the programme scheduled for November last year failed to materialize in the run-up to the general election. The Fund in February this year sent a mission to Accra to take stock of the 2016 economic developments and attempt an outlook into 2017.
The mission led by led by Joël Toujas-Bernaté concluded that Ghana’s economy continued to face challenges.
In spite of a growth rate of 3.6 per cent in 2016 the decline in inflation was described as “slower than expected.”
“In 2016, the overall fiscal deficit (on a cash basis) deteriorated to an estimated 9 percent of GDP, instead of declining to 5¼ percent of GDP as envisaged under the IMF-supported programme,” the mission stated in part.
The ICU General Secretary lamented the austere conditionalities that go with IMF programmes and how they turn to worsen the plight of countries that take to such programmes.
“Wherever they go, public sector workers and the business community bear the brunt of the austere regime they impose because they freeze employment, control wages and supervise fiscal rigidity that stall growth by contracting economic activities and therefore stifling the economy,” Mr Kotei explained.
“This is what we have experienced in the last two years that the IMF has come on board,” he added.
The Trades Union Congress (TUC) in its budget proposals called on the new government to end the programme swiftly.
“We urge government to end the IMF programme as quickly as possible, so that we can start implementing our own home-grown policies that we can take responsibility for. We do not know of any country that has developed following the policies of the IMF. We doubt if Ghana will be the first country to achieve that,” the Union stated.
Former rector of the Ghana Institute of Management and Public Administration (GIMPA), Prof. Stephen Adei also recently called for the discontinuation of the programme, describing it as “very restrictive and does not allow for innovative ideas that can transform the economy.”
“I personally think that it is not good for us especially at this stage to continue the IMF programme because it is too restrictive,” he said.
He emphasized that the IMF should not determine how the country is run because they give the country $148 million a year.
” To say that giving us $148 million a year, which is peanut, you determine how our country is to be run, is not good”
He however stated that IMF policies are only better when a country has bad leadership. He says bad leader s adopt the IMF policies to cover up for their performance.
“When you have bad leaders such programmes are good because at least it is the lesser of the two evils and when we have developmental leadership, they need to be able to innovate and think out of the box,” he explained.
Economist Leslie Mensah is however of the view that very little would change within the extension period.
According to him, the initial plan was to complete the programme in March 2018 and there is talk of an extension to December 2018.
Rather than be concerned about the length of extension of the programme, Mr Mensah called for increased efforts to get the macro-economy in a healthy state, with all indicators pointing in the right direction.
“If inflation should fall further, economic growth picks up and government revenues also pick up then labour would have a stronger ground to negotiate higher wages ,” he pointed out.
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