Professor Godfred Bokpin, an economist, claims that Ghana’s massive budget deficit is the reason why the Executive Board of the International Monetary Fund appears reluctant to approve the country’s $3 billion bailout.
He claims that the nation’s entire 2023 budget deficit will be $5 billion, $2 billion more than the IMF bailout.
The only reason Ghana was able to obtain a staff-level agreement, according to him, was presumably due to pressure from Washington as a result of Ghana’s recent courtship of the US in an effort to obtain an IMF bailout.
“And I think that in all of this it’s obvious now that the hole that has to be closed is so big, and it’s the reason why the IMF doesn’t want to approve the programme,” he said on JoyNews.
He explained that “if you pick the deficit in 2023 alone, in the budget as approved by the IMF in dollar terms, using Bank of Ghana’s official exchange rate, it’s more than $5 billion to close.
“Meanwhile, if you approve the programme this year, the gap in this year’s budget alone is more than what the IMF programme would bring over three years.
“So the IMF knows very well that without assurance, of either debt relief or fresh funding from Ghana’s multilateral and bilateral partners the programme can only achieve limited effect.”