IMF exit: Seth Terkper explains why going to IMF was a good thing

By Justice Kofi Bimpeh
Former Finance Minister, Seth Terkper

Former Finance Minister Seth Terkper has given reasons for which he believed going to the International Monetary Fund, IMF, in 2015 was a good thing.

According to him, going to the IMF in 2015 was a pragmatic step taken by the former Mahama administration.

The IMF last week approved the exit of Ghana from the programme with a final disbursement of about US$185.2 million to Ghana.

The fund provides financial assistance to member countries who have protracted balance of payment problems.

Read also: Final Disbursement: IMF approves $185.2m for Ghana

Ghana will officially exit the extended credit facility programme on April 3 2019, speaking on Bloomberg TV on the exit from IMF, Finance Minister Ken Ofori Atta said “I think we really have proven over this period, the clarity of our President Akufo-Addo’s vision of a Ghana Beyond Aid. So the principle of going alone of being sovereign independent is very clear.”

He added, “However, we’ve had great relation these two years with the Fund and we moved back to Article 4 – a 12 months review in which they come in every six months, we’ve also established an economic policy coordinating committee in which they will sit in.

Read also: Video: Ghana may opt for a long tenure bond-Ken Ofori Atta

Speaking to Joy FM inreaction to the exit from the programme, the former finance Minister who took Ghana to the IMF said: "you have to be pragmatic if you are managing an econmy and contrary to what people say, one of the outcomes of Sechi is to go to IMF because the fiscal situation particurlarly after we have calculated the laibility associated with the single pine and saved the situation, remember back then we have a bit of drought.......after we have seen all these things the pragmatic thing to do was to go to the IMF, it was one of the choices, you go or you don't, when we took over in 2013 we did a home grow with the assistance of Africa Development Bank we thought we could manage but when you calculate the subsidy, liabilities and when you calculate in particular impact of lack of gas supply, we were not getting cheap gas from Nigeria and we had to buy crude oil for VRA using our had currency to keep the power running so the situation just suggested you needed an institution to support the economy that will bring development partners to support the economy, this is a pragmatic thing to do."

Analyses from Economist

Economist Professor Peter Quartey says for Ghana not to go back to the International Monetary Fund, IMF, again we need to manage our expenditure and revenue better in 2020.

According to him, we need to grow our revenue base because currently, we are always recording revenue shortfalls.

“The first thing is how do we manage our resources, our revenue especially. We need to grow the revenue base. At the moment we are always recording revenue shortfalls so what innovative thing can the government use to raise revenue to be it from the informal sector or broadening the tax base," he said. News