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General News of Monday, 13 April 2015

Source: Peace FM

John Boadu doubts impact of $114 bailout cash

National Organiser of the main opposition New Patriotic Party (NPP), John Boadu, has expressed strong doubts that the initial tranche of $114 million released by the International Monetary Fund (IMF) meant to be used to shore up Bank of Ghana’s declining reserves will cause any significant changes in the economy simply because the amount is almost equivalent to monies spent by some big clubs in Europe to purchase a gifted football player.

Transfers in football enable clubs and football managers to buy and or sell players on an open market. Some club owners in Europe are noted for paying outrageous fees just to secure the move of a particular player.

Contributing to a panel discussion on Peace FM, John Boadu was of the view that the bailout programme from the IMF could even see Ghana go through another phase of hardship while the country tries to meet its strict conditionality in order to restore fiscal discipline and macroeconomic stability.

Downplaying the effects of IMF's support to the country, he argues that the first tranche of the financial relief would not automatically lead to the rescue of the cedi which in recent weeks has significantly declined against the dollar.

The IMF approved an extended credit facility worth $918 million last Friday for Ghana after several months of deliberations. The government turned to the IMF in 2014 for a bailout as a result of high inflation rates, depreciation of the cedi, huge public sector wage bill and a host of other factors which were crippling the economy.

Finance Minister Seth Terkper has said the expected initial tranche of $114 million will be used to shore up the Bank of Ghana’s (BoG) declining reserves.

President Mahama told Muslim leaders in the Ashanti Region when he joined them to celebrate the birth of Prophet Mohammed, the IMF deal is good news for Ghana because “it allows us to deepen our social protection intervention to help cushion the poor and vulnerable in our society.”

But to John Boadu, had the ruling Mahama-led administration managed the economy well, the country would not have gone in for such an amount ‘which can be used to buy a single Chelsea player’.

“It is not just about going to IMF but the details or its implications are what matters. $144m: an amount which can be used to buy a Chelsea player. Then you have a President who will say the money is to cushion us…the same president who said we were not going for an IMF loan.

“You have run the country to a point where there is nothing to do but to borrow…money which can be used to transfer a Chelsea player…I see Ghana as a rich country…we are not poor and so I get surprised when things like this happen. What didn’t we say concerning this loan? But this government does not listen,” John Boadu stated.