An economics lecturer at the University of Ghana Business School (UGBS), Professor Godfred Bokpin, has stated that the authorized $3 billion International Monetary Fund (IMF) credit facility will worsen the situation for the disadvantaged.
Speaking to the media Prof. Bokpin intimated that it is too early to celebrate the approval of the programme especially as it will likely affect the poor.
“I don’t think that we should jubilate over this because there are painful adjustments ahead of us in order to restore macroeconomic stability. Whether we like it or not, restoring macro stability is going to come at a cost. Unfortunately, the adjustment cost in the programme will not be evenly distributed. The adverse distributional effect will impact the vulnerable more than those who actually inflicted this pain on us.
“If you look at the IMF programme, typically, the fiscal consolidation mix takes the form of revenue enhancement and expenditure restraint, but the IMF lent its support toward government’s approach such that the problem is more revenue than expenditure or corruption or efficiency and that is problematic.”
He further scolded the government’s reckless borrowing and spending which has brought the country thus far needing an IMF programme which demands sacrifices from businesses and households.
“You are looking at scaling up your tax-to-GDP ratio to up to 18.2 percent by the next two or three years and that is a lot of sacrifice on the part of businesses and households. And it cannot be solely that the reason Ghana is facing this crisis is because of low revenue because that is not true. If we were efficient with the little we were able to generate, and we were able to deal with corruption, this is not where this country would have been.”