An economist at the University of Ghana, Prof. Godfred Alufar Bokpin, has called on President-elect, John Dramani Mahama for a renegotiation of Ghana’s International Monetary Fund (IMF) programme, citing its current shortcomings in addressing the country’s economic challenges.
Speaking on Morning Starr with Naa Dedei Tettey, Prof. Bokpin explained that, in light of the rise in inflation, the IMF programme needs to be reassessed to better address the economic realities facing Ghanaians.
He lamented the design of the programme, arguing that it disproportionately shifted the burden of economic adjustment onto taxpayers, households, and businesses.
Prof. Bokpin further noted that the adjustment costs tied to fiscal consolidation and the imposition of numerous taxes have contributed to a misalignment between locally produced inflation and imported inflation.
Prof. Bokpin stressed the need for a comprehensive review of the IMF programme, suggesting that the adjustment costs should be better balanced between revenue and expenditure.
He also called for a focus on recovering stolen state funds through governance reforms.
Meanwhile, President-elect John Dramani Mahama has promised to renegotiate the programme with the IMF, and the IMF has agreed to that.
Now let’s come to IMF supported programme and why it ought to be renegotiated substantially. First, we said when the programme was approved that structurally, the programme wasn’t properly designed. We made this clear in May 2023 because the burden of adjustment was disproportionately shifted to tax payers across households and businesses. so if you see the pass through of the fiscal consolidation cost in the immediate, it was so substantial, that it actually changed the cost base of doing business in Ghana.”
“From November 2023, you realised that there was a misalignment between locally produced inflation and imported inflation. Until November 2023, imported inflation was higher that locally produced inflation but because of the IMF Programme adjustment cost and the numerous taxes that were imposed, you realise that all the cost passing through the financial statement of businesses and households, contributed to a higher cost of doing business.”
“So structurally, by design the programme ought to be looked at again so that wee find nice balance between sharing the adjustment cost with revenue,. expenditure and also prioritising recovery of stolen money through governance reforms, we have to cost that because people who inflict this pain on Ghanaians should not get away with it, only for Ghanaians to come and pay for it”
Hamdia
