TIG Post

Tag: Professor Hanke

  • ‘The Bible is a poor guide for macroeconomics’ – Ofori-Atta told

    ‘The Bible is a poor guide for macroeconomics’ – Ofori-Atta told

    Prof. Steve Hanke, an American economist, has continued to criticize Minister of Finance Ken Ofori-Atta for using biblical allusions to support his claims of an economic revival.

    The Economist cited a reference to Scripture the Minister made late last year in a report headed “Ghana has negotiated a preliminary IMF deal and halted debt payments,” which Hanke wrote on January 2, 2023.

    “Ghana’s Finance Minister Ofori-Atta justified defaulting on debt by quoting the Bible: “nothing will be lost, nothing will be missing.”

    “The Bible is a poor guide for macroeconomics. It’s time for Ofori-Atta to stop bamboozling Ghanaians and get real,” he emphasized.

    When Ofori-Atta launched a Domestic Debt Exchange program, one of the crucial requirements that led to a government and International Monetary Fund (IMF) Staff-Level Agreement days later, he made the biblical allusion.

    The intention to include pensions in the Exchange program, which plan has been cancelled with individual bonds now implicated, was a particular point of contention for the administration with labor.

    Ghana experienced a disastrous 2022 as a result of an economic crisis that compelled the government to apply for a loan from the IMF at a time when the cedi was fast losing value, inflation was out of control, and the government was subject to many downgrades by rating agencies.

    The government has serially blamed the crisis partly on the aftershocks of the COVID pandemic and the ongoing Russia-Ukraine war.

    It has promised to turn around the economic fortunes of the country after sealing a Staff-Level agreement with the IMF with the hope that funds from the US$3 billion facility will be released early this year.

  • New IMF deal will not fix Ghana’s problem – Prof Hanke reiterates

    Steve Hanke, a professor of applied economics at Johns Hopkins University, believes that Ghana’s economic issues won’t be resolved by a new International Monetary Fund (IMF) agreement.

    According to him, the eagerly anticipated agreement will fail just like earlier initiatives Ghana has undertaken with the Bretton Woods system.

    The economist mentioned Ghana’s national bond in a tweet on October 12 and noted that it has lost 50% of its value this year.

    “While talk of a debt default swirls in Ghana, its sovereign bonds tank. They have depreciated over 50% this year. Now, Pres. Akufo-Addo passes the begging bowl to the IMF. SPOILER ALERT: like Ghana’s past 16 IMF programs, a new one will fail to fix Ghana’s problems,” Professor Hanke tweeted.

    Ghana has since July this year been engaging IMF hoping to secure a US$3 billion deal which will be spread across a three-year duration.

    Ahead of that, there are moves by the government to restructure debts of investors after the completion of a Debt Sustainability Analysis (DSA) by IMF.

    A debt restructuring will result in a longer yield-to-maturity for government bonds and bills, or the implementation of the “haircut” strategy. Some investors’ returns on investments may be impacted by this.

    Meanwhile, former President John Dramani Mahama in an interview on VOA’s Straight Talk Africa has called for an end to the country’s continuous resort to the International Monetary Fund whenever it is confronted with economic headwinds.

    He said the “going and coming” to the IMF depleted people’s faith in the country’s democracy and it also created instability.

    He mentioned that the current return to the IMF to achieve debt sustainability and policy credibility should mark the start of governments prudently running the economy.

    “The economy is situated in an environment. It does not exist in isolation and so there are somethings that need to be done to create an environment for the economy to thrive. Some of them are governance issues, strengthening state-owned institutions, the fight against corruption and so many other things that create the environment for the economy to thrive.

    “I think that when we go into this programme and we bring debts back to sustainable levels and we are able to get the bridging facility in other to achieve policy credibility so that investors again feel confident that they can bring back their money into Ghana, then we must start from there and maintain that prudence.

    “This should be the last time we go to the IMF because going and coming, it creates a certain instability in the whole system and it also reduces the faith that people have in our democracy,” Mahama said.

  • Dr. Bawumia is an unmitigated disaster – Prof. Hanke backs Mahama’s aide

    Dr. Mahamudu Bawumia, Vice President, has come under fire from Johns Hopkins University professor of applied economics Steve Hanke for how the economy has performed while he has been in office.

    Dr. Bawumia, in the opinion of Prof. Hanke, has been a “unmitigated disaster” in charge of Ghana’s economy.

    The US-based economist expressed his complete agreement with the viewpoint in a tweet that made reference to a GhanaWeb article where Felix Kwakye Ofosu had made a like statement.

    “Former Deputy Communications Minister Kwakye Ofosu calls #Ghana’s VP Bawumia an “unmitigated disaster.” I couldn’t agree more. Today, I measure Ghana’s inflation at a punishing 87%/yr. That’s more than 2.5 TIMES the official rate,” Prof Stave Hanke tweeted.

    This is not the first time Professor Hanke has hit hard at Dr. Bawumia who doubles as the de facto head of the Economic Management Team (EMT).

    In a September 20 tweet, the professor identified the Vice President as the cause of the country’s problems.

    According to him, even though the Vice President rode on the back of coming to solve the problems of the country, he is rather doing the opposite by creating problems.

    Professor Hanke was commenting on the depreciation of the Ghana Cedi against major trading currencies, especially the US dollar.

    “#Ghana’s VP Bawumia says he’s ‘into politics to help people solve problems.’ SPOILER ALERT: Bawumia is the one CREATING the problems. Today, I measure GHA’s inflation at a stunning 81%/yr, nearly 2.5 TIMES the official rate,” he tweeted.