IMF Programme should focus on job creation — Akufo-Addo
The presidential candidate of the New Patriotic Party (NPP) in the 2012 elections, Nana Addo Dankwa Akufo-Addo, has stated that job creation for the teeming unemployed youth and structural transformation of the economy should be the main focus for any International Monetary Fund (IMF) programme for the country.
In his view, the extent to which the IMF package would protect and create jobs, as well as facilitate the structural transformation of the economy, must be one of the foremost considerations by Ghana’s team of negotiators at any bailout talks with the IMF.
Nana Akufo-Addo, who is also a contender in the flag-bearer race of the NPP for the 2016 elections, made the suggestion when he shared his perspective on the need for the country to seek an IMF assistance on the ailing economy in an exclusive interview with the Daily Graphic in Accra on Tuesday.
Following months of dire economic challenges confronting the country, President John Dramani Mahama has directed his economic management team to open talks with the IMF and other development partners for a programme that will support the country’s fiscal consolidation and address macroeconomic imbalances.
The directive, with a focus to stabilise the country’s growth outlook, came after the Presidential Advisory Council had met on August 1, 2014 to discuss a range of issues affecting the economy.
This has elicited mixed views across the country, with many economists saying the directive is positive, while the political parties are somehow divided on the issue.
Ghana's budget deficit is going beyond sustainable limits; the currency is depreciating at a faster rate than expected; there have been hikes in food and fuel prices and utility tariffs, while taxes have been imposed on a number of products and services.
Four Key Criteria
According to Nana Akufo-Addo, the IMF deal must help address all the fundamental challenges confronting the country.
Those, he noted, were job protection and creation, the high cost of living, support for businesses and, on medium-to-long-term objectives, support for the transformational and structural adjustment of the economy.
He said businesses in the country were collapsing and pointed out that it was only when businesses grew that the country could reduce the high cost of doing business.
On medium-to-long-term objectives, Nana Akufo-Addo said, “We cannot continue to produce raw materials at the expense of transforming our economy structurally. Anything short of meeting these conditions, in my view, must be considered in concluding that the IMF deal is a good or bad deal,” he added.
Negotiating skills
In his opinion, the economic fate of the country would largely depend on its negotiators and how well they could defend their proposal.
On his expectations as to what good would come out of the IMF bailout, he simply said, “Let us wait and see.”
“So far, the way the government has run the economy does not give some of us much hope. But for Ghana’s sake, I hope the fund will be able to get us a good deal. We have to hope that the government can negotiate with the IMF, so that we can meet these criteria outlined.
“I also hope that when they get a good deal for the country, they will ensure strict adherence to financial discipline and be more responsible in the management of the economy. It will just be too bad when they do otherwise,” he added.
Economy in crisis
He said the decision to seek an economic bailout was a clear admission that the economy was in crisis and solutions had to be urgently found to the crisis.
“Indeed, going back to the IMF after Ghana had weaned itself under President J. A. Kufuor in 2006 is a clear manifestation that this government’s management of the economy has been a spectacular failure.
“As a result of failure on the part of the government, struggling Ghanaians who are working so hard to make ends meet will once again be asked to pay for the mismanagement of the economy, as well as the very hardships their inefficiencies have created,” Nana Akufo-Addo added.
