Civil society holds forum on Ghana’s IMF Programme
The Civil Society Platform has advised the government to position itself economically to avoid going back to the International Monetary Fund (IMF) after its exit from the programme in 2018.
The forum explained that the gross indiscipline in the management of Ghana’s resources had been responsible for the country’s financial woes.
However, to restore policy credibility and macro-economic stability due to the poor economic management, and enhance investor confidence, the present government asked for a one-year extension of the IMF Programme, to address the key challenges.
Mr Francis Tsegah, a Former Ambassador, and Senior Research Fellow with the Ghana Centre for Democratic Development (CDD), at the opening of the Fifth National Annual Civil Society Forum in Accra on Thursday, June 28, 2018, urged the government to put in more efforts to strengthen fiscal discipline.
He said although the Government had indicated an exit from the programme by the close of 2018, the fiscal performance under the current ECF-backed programme has been generally disappointing.
The Forum which was converged with support from Oxfam was to review the three years of implementing Ghana’s sixteenth Stabilisation Programme with the IMF, and see how the country would avert another stabilisation programme with the Fund.
Mr Senanu Klutse, an Economist with the Centre for Policy Analysis (CEPA) in a presentation on the IMF programme monitoring results, attributed the poor fiscal performance to the emergence of a persisting tendency of deteriorating tax efforts right from the beginning of the programme, hence actual collection below trend was a matter of concern going forward.
He said expenditures were also officially reported to have been “controlled” sharply in response to the shortfall in revenue and grants, and without acknowledgement of payment of arrears contrary to findings of CEPA, other CSOs, media reports, rising NPL ratios in the banking sector, and the Auditor General.
He said the excess spending on the 2016 election, marked it out as arguably the worst in the Fourth Republic.
Mr Klutse, however, said although the government may have good reasons to look at the future with confidence and hope, past lessons should be properly learnt, adding that repeated episodes of large fiscal slippages had transmitted significant volatility to the economy.
This he said had contributed to sizable depreciation, high inflation, widening domestic and external imbalances, and rising public debt burden.
He indicated that attempts to correct such imbalances had been short-lived as good intentions had floundered against the challenge of budget rigidities, economic inefficiencies, vested interests and corrupt practices.
Mr Kluste said going forward, primacy must be given to the pursuit of credible and sustained fiscal consolidation to reverse the debt dynamics and reduce financing needs.
He said the Government must not only accept the constraints on spending of the weak economy it had inherited, but should communicate the reality of the situation to its support base and society at large.
“The ruling NPP won a mandate to pursue macro-economic stability and ‘create prosperity and opportunity for all Ghanaians’ “, hence the implementation if the election promises would need to be carefully sequenced, policies clearly and consistently communicated with the view to minimising partisanship and get the buy-in of the citizenry.
This it said should help anchor expectations and better lay the seeds for lasting success of the new policy initiatives.
He noted that fiscal slippages despite PFM reforms and implementation of GIFMIS, had raised legitimate concerns about government’s ability to rein in spending, however opting out of the programme prematurely would mean the immediate withdrawal of financial support from the IMF, the World Bank and other Development Partners, leading to a further weakening of the investor confidence.
He said successful completion of the programme would mean an increased role for CSOs going forward in its role to among other things, hold the government responsible for much improved data transparency, accountable to ensure good economic governance and thus effectively playing the head-teacher role.