Economic advisory at Deloitte Africa, Yaw Appiah Lartey Esq., has urged the government to reconsider its decision not to renegotiate or extend Ghana’s ongoing programme with the International Monetary Fund (IMF).
This comes after the Finance Minister, Dr. Cassiel Ato Forson, during joint press conference with the IMF in Accra, stated that government has no plans to renegotiate or extend the country’s current programme with the IMF.
Dr. Forson emphasized the government’s commitment to implementing the program to restore macroeconomic stability and drive sustainable growth.
According to him, renegotiating the programme would imply a lack of confidence in its objectives.
Instead, the government is focused on strengthening expenditure controls, eliminating arrears, and improving budget credibility.
“Renegotiating pre-supposes that you don’t believe in the programme and so you want to open up the conversation to look at other parameters of the programme. That isn’t the position of the government. The government is committed to the implementation to achieve the objectives of the IMF programme,” he said.
Reacting to this on Morning Starr with Naa Dedei Tettey, Mr. Lartey noted that negotiating with the IMF could have been beneficial, especially considering the decline in international donor funds.
He cited examples such as the USAID and the UK’s decision to increase their defense budget at the expense of development aid.
Mr. Lartey argues that with the shrinking global development aid fund, it would have been beneficial for Ghana to renegotiate the funds to be disbursed.
He noted that a significant portion of the funds had already been disbursed before the current government came to power, and some renegotiation of the amount to be disbursed would have been expected.
He said, “I’m not surprised, given some of the comments that have come from the government circles, particularly from the President and even the Minister of Finance himself during his presser, so there wasn’t a clear position as to government having an intention to negotiate an extension of the IMF program. So I’m not surprised at all. It was something that we thought was a possibility and was something that government was considering. So it’s not surprising to me. I think what we need to understand is what are government’s programs and objectives that have been outlined to help mitigate any potential impacts, that’s called the adverse impacts of bringing the IMF programme to an end…..”
“If you look at the development in international feeds or international donor funds, it is shrinking. And this is coming out of two or three developments. The first one is the shift in the United States. So the United States government has decided to drop or even cancel all development-based programmes, particularly the USAID funds and a few other development funds. So that global development aid fund is limited. UK has decided to increase their defense budget by 40 percent at the expense of development aid. So international development aid coming from the UK government has also gone down. And the European Union are increasing their defense budget, given what’s happening in Russia and Ukraine. And it’s also coming at the expense of development aid.”
Mr. Lartey added, “So development aid is shrinking. So if you have an opportunity to negotiate with a development partner that has got consistent revenue, whose incomes are not influenced by any government, whether United States, European Union, I would have expected that you negotiate not an extension of the programme, but renegotiation of the funds to be disbursed to government. As you know, a significant portion of the funds had been disbursed even before the government came to power. So if you want any form of renegotiation, I would expect some renegotiation of the amount to be disbursed. But I think that was not the case.”
The IMF has been supporting Ghana’s economic recovery through its Extended Credit Facility (ECF) programme.
The programme aims to restore macroeconomic stability, build resilience, and lay the foundation for stronger and more inclusive growth.
