Use IMF money to boost the economy– Ayariga tells government
The Presidential Candidate of the Peoples National Convention (PNC) in the 2012 Elections, Mr Hassan Ayariga, has called on the government to the utilise the money it is getting from the International Monetary Fund (IMF) in a way that will boost the economy in the interest of all Ghanaians.
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Speaking in an interview with Capital TV, which was aired Wednesday, Mr Ayariga said the $930 million Ghana was getting from the IMF as part of a three-year bail-out programme was crucial to stabilising the economy.
The politician defended the decision of the government to sign up for the IMF programme, describing it as necessary to alleviate the current economic challenges the country was facing.
He added that Ghana had sought similar help from the IMF in the past.
Meanwhile, the first tranche of cash - $114 million - from the International Monetary Fund (IMF), meant to shore up the Bank of Ghana (BoG)’s declining reserves and help stabilise the cedi, has hit the accounts of the Bank of Ghana.
The IMF has also said that Ghana must implement the strict measures attached to the bailout.
The Managing Director of the Fund, Ms Christine Lagarde, told the Daily Graphic in an exclusive interview Wednesday that the implementation of those measures meant to diversify the economy, was necessary to reduce vulnerabilities.
According to her, “Ghana made tremendous strides over the past 15 years and ranked among the fast-growing countries in Africa that have made significant progress in poverty reduction, but the discovery of oil might have given the illusion that the public finance imbalances would get resolved easily.
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“This may have weakened the sense of fiscal discipline. But, in reality, oil revenues flowing to the budget have been relatively limited, compared with other oil producers (less than three per cent of Gross Domestic Product (GDP) or about $35 per capita in 2014)."
"As a consequence, public debt has more than doubled since Ghana received debt relief in 2005,” she added.
The outspoken IMF chief said unfortunately, Ghana’s large borrowing was not generally used for investments but rather to finance large recurrent spending, pointing out that the debt service, which was now very high, further constrained spending in priority sectors such as social protection and key infrastructure.
“The key to success lies in Ghana’s commitment to put in place measures that address the underlying causes of the huge budget deficits we have seen in the recent past.
“On that score, I am encouraged by the commitment to the current measures on the part of senior officials in the government, including the President. As in the past, the IMF will support the implementation of the government’s programme, both financially and through technical and policy advice,” Ms Lagarde said.