IMF not dictating to Ghana — Terkper
The Minister of Finance, Mr Seth Terkper, has rejected the notion that the country is being dictated to by the International Monetary Fund (IMF).
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According to him, the country is also implementing its own home-grown policies, alongside IMF conditions.
Speaking to the media after he had presented a statement on the economy in Parliament last Thursday, Mr Terkper said, “It is not entirely true that everything we are doing now is being dictated by the IMF. When prices fall, I don’t think you need the IMF to tell you to make adjustments.”
Home-grown policies
Among the home-grown policies, he said, was a bill that was to be introduced in Parliament to amend sections of the Petroleum Revenue Management Act.
He said the amendment would allow the Ministry of Finance to use its discretion in the way the revenues were calculated when the need arose.
Another home-grown policy, he said, was the introduction of the Oil Stabilisation Fund in 2011.
According to him, the fund had been able to generate $590 million and the government was using part of the amount to service some of its debt.
A portion of the stabilisation revenue, he said, would also be used to support this year’s budget.
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Mr Terkper said the massive fall in the prices of crude oil on the market had made it necessary for the government to adjust its budget.
He added that the fall had led to a gap in the government’s revenue and needed to be resolved.
Long term loans
Explaining why the government was borrowing from the IMF and other sources when it could rely on other sources such as the Euro bond, the minister said it was more prudent to borrow long term to finance capital expenditure projects.
Mr Terkper said hopefully such projects would in the long run work to repay the loans instead of using internally-generated funds and taxes to pay for such loans.
“Our public debt increases when we use the taxpayer’s money to repay loans,” he said.
To that end, Mr Terkper said the government was presently replacing short-term loans with long-term ones so that the projects, most of which were commercial in nature, such as the gas project in Atuabo, would pay for the loans in the long term.
“We want the gas processing plant to pay for the loan,” he said and added that “in 10 years the plant can pay for the loan used in establishing it.”
According to him, the global institution where you could get loans quickly is the IMF and that is why the government turned to the fund for its long-term loan.
“It can protect the reserve and the foreign exchange till the situation gets better,” Mr Terkper added.