‘IMF bailout programme to be extended if…’
By Isaac AIDOO, Accra
A FORMER Second Deputy Governor of the Bank of Ghana (BoG), Dr Johnson P. Asiama, has hinted at the possibility of an extension to Ghana’s current bailout program with the International Monetary Fund (IMF) if the opposition National Democratic Congress (NDC) wins the upcoming 2024 general elections.
In an exclusive interview with ZED FM’s Isaac Aidoo, Dr. Asiama emphasized that a change in government could provide an opportunity for the new administration to renegotiate the terms of the program with the IMF. He suggested that the IMF might find it more convenient to work with a new government, which could request adjustments to the existing agreement.
“If a new government comes, one of the advantages will be that the new government can say, ‘Well, I didn’t draw this program with you, IMF, in the first place. When I look at what’s in place, I see some issues. Number one, you front-loaded most of the money. So out of the three billion committed, you’ve already given off about two billion,'” Dr. Asiama explained.
He further noted that a new administration could use the opportunity to negotiate for additional funding and time to implement further reforms. “I’m still having some shocks or some other things for which I think that we’ll need more money. But in return, these are the additional reforms we are going to implement, and for which we will need maybe one additional year. So instead of the program ending in 2026, we want to extend it by some six months,” he added.
While Dr. Asiama did not make a definitive statement about whether an extension is necessary, he highlighted that it would depend on the outcome of future negotiations and the state of the economy at the end of the year. “It all depends on the negotiations and also on how the year ends. But all I’m saying is that you have to go into that negotiation,” he stated.
Dr. Asiama also pointed out the need for the government to make concessions that would convince the IMF to provide additional resources. “You have to be able to make concessions about what really will deliver the results. All that the IMF wants to see is that, by the time you complete the program, your macroeconomic instability problem is solved,” he concluded. The NDC’s potential approach to the IMF bailout program could have significant implications for Ghana’s economic recovery and fiscal stability, depending on the outcome of the 2024 elections.
