Former Finance Minister, and currently a consultant at the International Monetary Fund (IMF) Seth Terkper, has indicated that countries that exited the IMF may go back to the Bretton Woods institution if the outbreak of the coronavirus lasts longer
He indicated that the COVID-19 outbreak is having a negative effect on the economy globally, a situation that may compel some countries that had exited the IMF to return to seek help from the same body.
It is recalled that after Ghana exited the IMF under the Akufo-Addo administration, Finance Minster Ken Ofori Atta said the country won’t go back to the institution because sufficient macroeconomic gains have been made.
“The expectation of all of this is that we are consistently on top of the macroeconomics of the country, and making sure that we work within the budget Parliament will have approved.
“In addition to that, we have set up the Economic Planning and Coordinating Council so we don’t have any slippages in the macro and fiscal policies. We feel good about where we are,” he told the B&FT.
He indicated that the gains made have resulted in a rising and broad-based GDP growth momentum, with the economy growing by 6.1% (end Q3 2018 average); 8.1% in 2017; and 3.4% in 2016.
On what occasioned the IMF programme, he explained that in 2012 before the general elections, Ghana recorded a deficit of 11.5% of GDP – the highest deficit on record in the fourth republic – with the IMF calling for urgent measures to restore macroeconomic stability.
But Mr Terkper under whose watch Ghana went to the IMF, told Randy Abbey host of the Good Morning Ghana programme on Metro TV, Wednesday March 25, 2020 that : “We may see some of these countries going back to the IMF if the coronavirus continues.”
He further advised that Ghana needs to “Build our own basket through the petroleum revenue. That is the only way we can be a truly middle income country.”
Meanwhile Mr Ofori-Atta has told Parliament that the $100 million announced by President Akufo-Addo to fight coronavirus is not ready.
President Akufo-Addo in an address said the finance minister has been directed to make the funds available to respond to the deadly virus. Six cases have so far been confirmed in Ghana.
The amount, according to the President “is to fund the expansion of infrastructure, purchase of materials and equipment, and public education.”
But briefing Parliament about the fiscal impact of Covid-19 which has crushed the international capital market, Mr. Ofori-Atta disclosed Ghana has applied to the World Bank to tap into a $12 billion fast track Covid-19 facility and the IMF $10 billion facility to address the deadly virus.
According to the minister, the government will augment allocations from the two institutions with local resources.