Even if Ghana secures its 18th extended loan facility from the International Monetary Fund (IMF), Michael Harry Yamson, Managing Partner at Ishmael Yamson and Associates, fears the country’s economic woes will further worsen.
He believes the government has not demonstrated enough fiscal and political discipline in order to improve macroeconomic stability.
Mr. Yamson told Bernard Avle on Citi TV‘s Point of View that Ghana will not be in a secure position to maximize its usage of the US$ 3 billion bailout being sought from the IMF until the many structural, revenue mobilization and public financial management challenges are fixed.
“The bailout will be meaningful if we are ready to receive it for good purposes. But what has changed in the way the public sector soaks money? Has any spending cut been announced that you know of? Nothing, if we get that relief, it will mean nothing. It will just come to sit in a basket. At the very least, we should know that this will only come to give us that mirage of confidence. The US$ 3 billion is a waste.”
According to the IMF, Ghana has fulfilled all the prerequisites for its program request to be approved by the executive board except for the assurance of financing from external creditors.
The institution has assured that once Ghana secures the financing assurance, its staff will quickly present the program request to the executive board for approval.
Finance Minister, Ken Ofori-Atta, has also disclosed that Ghana is likely to receive IMF Board approval for the $3 billion bailout by the close of May 2023 for economic recovery.
But Michael Harry Yamson remains sceptical.
“The only thing we took to Washington is three tax incentives, but everyone knows those taxes will have a chilling effect on the private sector so where will the growth come from to power the public purse so government will have room to go and do development?” he expressed.
Ghana secured a staff-level agreement (SLA) for the $3 billion request in December 2022 but efforts to move to the final lap have dragged as bilateral creditors haggle over the terms of the debt restructuring exercise.