Business General

NPP’s three wise men rush Ghana to IMF without Bawumia’s input

The President, Nana Akufo-Addo, his bible-quoting cousin and Finance Minister, Ken Ofori-Atta, joined by another cousin; Gabby Asare-Otchere Darko, the three wise men running the country, like a dying patient, have rushed it before the International Monetary Fund (IMF) for an emergency bailout.

This, follows severe challenges with Ghana’s economy, with difficulties in finding money to pay salaries of public sector workers, executes projects and also meets debt obligations to lenders both within and aside the country.

The decision, has left communicators of the governing party disappointed, ashamed, tongued-tied and brooding in total silence, after years of calling ex-President John Dramani Mahama, lazy and incompetent for his 2015 decision to take a similar IMF emergency pill.

Ghana’s situation, has been likened to that of Sri Lanka. The South Asia country, which is also facing its worst economic crisis in more than 70 years, with its economy shrinking by 1.6 percent in the first quarter of this year, according to official data. It has defaulted on its $51bn foreign debt and is now holding bailout talks with the IMF.

Ahead of Ghana’s bailout talks with the IMF, which was announced in a statement issued by the Information Ministry on Friday, July 1, 2022, the country was said to be having trouble raising cash through bonds in the international market, because those leading the bonds, including Ken Ofori-Atta, have lost credibility.

But strangely, the Vice-President, Dr Mahamudu Bawumia, who is the Chairman of Government’s Economic Management Team, was not mentioned as the one to lead the impending bailout talks with the Breton Wood Institution.

Insiders, have said that the Vice-President, has not been active in the management of the economy for some time now. It is a “one man show” by Ken Ofori-Atta, who President Akufo-Addo only listens to.

Dr Bawumia, The Herald learnt, has not been in favour of many of the decisions, such as the E-levy, Agyapa Royalties deal and expenditures like the National Cathedral project. He has publicly avoided speaking about these, because of his objections to many decisions by the Finance Minister.

In the case of E-Levy, Dr Bawumia, had told Kwame Sefa Kayi on Peace FM in 2020 days before Ken Ofori-Atta floated the idea to reject it, saying “My view is that we should not tax mobile money because a lot of the people who are using mobile money transactions are very poor people. For example, someone just sends GH¢5 on mobile money, and why would you want to tax that?”

It is not clear, the last time the Government’s Economic Management Team, which also has Prof Gyan Baffour, Dr Akoto Osei, Dr Afriyie Acquah, Alan Kyrematen, Boakye Adjarko, Ken Ofori-Atta, Presidential Yaw Osafo Marfo, met to decide on anything with respect to the economy.

The statement had said that “the President of the Republic, Nana Addo Dankwa Akufo-Addo, has authorized Finance Minister Ken Ofori-Atta to commence formal engagements with the International Monetary Fund (IMF), inviting the Fund to support an economic program put together by the Government of Ghana.”

“This follows a telephone conversation between the President and the IMF Managing Director, Miss Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund,” the statement noted.

The IMF, has since confirmed its engagement with Ghanaian government.

It said “We can confirm that the authorities have been in touch to request Fund’s support to #Ghana’s own economic program. The #IMF stands ready to assist #Ghana to restore macroeconomics stability; safeguard debt sustainability; promote inclusive and sustainable growth; and face the impact of the war in #Ukraine and the lingering pandemic.

“We are looking forward to meeting with the authorities in the coming weeks to start the initial discussions. #IMFAfrica.

The statement by the Information Ministry, had added that the government had already decided to engage the IMF for support after a cabinet meeting held on June 30, 2022.

“The engagement with the IMF will seek to provide a balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia-Ukraine crises,” the statement added.

This development comes days after another cousin of the President, Gabby Otchere-Darko, said he was not against the government seeking economic support from the IMF, adding any move or plan by the government to go to the IMF for a programme would be a matter of principle.

“Am I against an IMF programme in principle? No. I am not for an IMF programme that throws peanuts at us but imposes conditions that will end up hurting the poor, jobs and businesses more.

“Covid-19 and War in Ukraine are not of Africa’s doing, but more to our doom. A programme that pretends it is all our doing is doomed to fail,” he tweeted on Monday, June 27.

Prior to Gabby Otchere-Darko’s tweet, Deputy Finance Minister, John Kumah, had hinted that the government may consider going to the IMF for a programme, if the current home-grown programme fails to bring the needed economic stability and restore investor confidence.

He indicated that an IMF programme, will be pursued if needed.

On his part, former President John Mahama, has called on the government to urgently seek support from the IMF.

Speaking at the launch of the Think Progress Ghana think tank on Thursday, the former President urged the government to seek support from the International Monetary Fund (IMF) to enhance the country’s economic fortunes.

“Due to the nature and depth of our economic problems, this government virtually has no other sustainable option.

“That is one of the things this government lacks. They don’t have fiscal discipline and that is why they are even afraid to go into an IMF programme,” the former President remarked.

The former President has subsequently issued a statement welcoming the decision by President Akufo-Addo to formally engage the IMF but stressing that “the Finance Minister who has supervised the disastrous collapse of the economy cannot and should not be part of the team of negotiators, because “he has lost credibility and the trust and confidence of stakeholders in our economy”.

He pointed out that “beyond the announcement of engagement with the IMF, a comprehensive home-grown programme should be fashioned out and presented to the Fund for support. It is imperative that a team of skilled and competent negotiators is put together to obtain the best set of measures with the Fund”.

In a Facebook post Mr Mahama wrote “I welcome President Akufo-Addo’s decision to formally engage the IMF with the view to entering into a programme under the Fund.

“Though belated, it should mark an important step towards addressing the dire economic situation, which has left Ghanaians wallowing under intense suffering and hardships.

“Beyond the announcement of engagement with the IMF, a comprehensive home-grown programme should be fashioned out and presented to the Fund for support. It is imperative that a team of skilled and competent negotiators is put together to obtain the best set of measures with the Fund.

“The Finance Minister who has supervised the disastrous collapse of the economy cannot and should not be part of the team of negotiators. He has lost credibility and the trust and confidence of stakeholders in our economy.

“President Akufo-Addo must take a bold decision to replace his finance minister immediately with a more assured and competent person who is willing and able to work tirelessly to turn our almost hopeless situation around.

“In addition, given his obvious failures, the Vice President must be relieved of his responsibility as Chair of the Economic Management Team to enable the President to reconstitute the team.

“We must draw useful lessons from this episode and avoid cheap politicking with the economy; that can only yield the disastrous outcomes that have brought us here.

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