Government has been advised to overlook public criticisms and go for financial support from the International Monetary Fund to put the fiscal economy in a better shape.
According to Head of Finance Department at the Valley View University, Dr. Williams Peprah, the time is up for government to go to the Fund for liquidity support.
Finance Minister, Ken Ofori-Atta, last week pointed out that the public sector could no longer employ new people and therefore fresh graduates should go into entrepreneurship.
But Dr. Peprah who is one of the few persons to predict that the government could turn its attention to the Fund because of the precarious nature of public finances, tells Joy Business the return to the Bretton Wood for an economic programme is inevitable.
“I’ve always been mentioning the fact that we’ll have to seek help from the IMF to be able to survive. My assertion is based on the budget  and then also the actual figures as presented by the Finance Minister. Just recently, the Finance Minister confirmed that our payroll is full, and also we have gone above our payroll limit within the budget.”
“Government says it’s going to spend ¢25 billion. Now we’re around ¢30 billion which is about 20% higher than what we projected to spend. So looking at this particular issue on our wage bill, and then also noticing that our revenue generation from taxation has gone down, this is the reason why I’ve stated that we will need to go to IMF for some liquidity support.” Dr. Peprah further intimated.
On why government is playing politics with the state of the economy, Dr. Peprah said it is wrong for politicians to play politics with the economy, adding, “I’ve always been arguing that we should do away with the politics and face the reality. Now the reality is that, we don’t have the liquidity to survive as a country”.
“We’ll need support from IMF…I mean liquidity injection. I think in your report this morning, you reported that banks are going to slowdown in investing in government securities because Christmas is coming. Their customers should be coming in for more funds from the banks, so they have to slowdown their investments in government securities”, he pointed out.
“This is the right time for government to go to IMF, go with a plan. First is your labour wage bill, that you’re going to control your wage bill and based on that, also show how some capital expenditure and also recurrent expenditures will be managed. These are the areas that we have to look at.”
Every support from the IMF comes with conditionality, but Dr. Peprah said the government should outlined its plan to the Fund, a strategy the Bretton Wood institution will accept.
“As a country, we can go with our own plan and tell IMF that we’re going to restrict ourselves when it comes to labour, employment. We’re going to restrict ourselves when it comes to capital expenditure and we’re going to restrict ourselves when it comes to recurrent expenditures.”