IMF programme places Ghana’s economic managers in a ‘straitjacket’ – IEA

According to him, the $3 billion loan facility offered to Ghana rather places Ghana’s economic managers in a “straitjacket”, making it difficult for them to implement due to limited innovative economic ideas to address the economic challenges.

He argued that the IMF-supported programme for Ghana does not inspire economic dynamism which is required to expand economic growth and development.

“In general, the programme places Ghana’s economic managers in a ‘straitjacket’, with very little room for policy discretion or manoeuvre. This is an “auto – pilot – like” programme, as it limits the opportunity to intervene in the economy to respond to changing dynamics,” he said this during a engagement with journalists in Accra.

Dr Kwakye continued, “The COVID-19 pandemic and Russia – Ukraine war has exposed Ghana’s existing vulnerabilities, culminating in the economic crisis that drove us back to the IMF. We need to learn lessons from this experience. Most importantly, even beyond the IMF programme requirements, we must begin to build strong economic and financial buffers including a sizable fiscal space, a cushion of reserves”.

On May 17, 2023, IMF approved Ghana’s request for $3 billion bailout programme under an Extended Credit Facility (ECF) over three years.

The IMF programme, according to government, is aimed at restoring macroeconomic stability and safeguarding debt sustainability among many others.

Following the approval, the IMF credited the first tranche of the loan facility consisting of $600 million to the Bank of Ghana’s account. The remaining tranches of the loan will follow after reviews have been conducted by the Bretton Wood institution.