You are here: HomeBusiness2017 07 20Article 561050

Business News of Thursday, 20 July 2017


Come clean on IMF deal – ICU

Executive Secretary of Industrial and Commercial Workers Union, Solomon Kotei Executive Secretary of Industrial and Commercial Workers Union, Solomon Kotei

The Industrial and Commercial Workers Union (ICU) is unhappy with what it describes as government’s shifting position on the future of Ghana’s programme with the International Monetary Fund (IMF).

It has therefore urged government to bring finality to its decision to extend the programme or keep to the original deadline.

General Secretary of the ICU, Mr Solomon Kotei told Business that Ghanaians deserved to know the position of government on the programme.

ICU’s call comes on the back of increased speculation that government was considering extending the three year bailout programme with the Fund.

President Nana Akufo-Addo stated last Tuesday that the government will not extend the programme. He said the government would end the programme within the scheduled date of April 2018.

His government was on target with its policy to restore growth and create private sector jobs and so there was no need to extend it.
But few hours after the President’s session with the media, the Ministry of Finance issued a statement supposedly clarifying his statement.

The Ministry statement was to the effect that Ghana will complete the IMF programme through its “budget cycle of January 2018 through December 2018.”
“The 2018 budget will therefore be the last budget under the current IMF programme. After the completion of the programme at the end of the budget cycle in December 2018, government will not extend it,” the statement noted.
Mr Kotei was worried that the letter from the Ministry of Finance had further deepened the speculation.

The ICU is on record to have wondered “what does the extension seek to do? Will the programme now allow our teachers and nurses to gain employment? Are we going to add more loans to what we have already taken?”

According to Mr Kotei , wherever the IMF goes, public sector workers and the business community bear the brunt of the austere regime they impose because they freeze employment, control wages and supervise fiscal rigidity that stall growth by contracting economic activities, thereby stifling the economy.

The Trades Union Congress (TUC) recently called for an immediate end to the programme, saying “we still hold the view that the IMF-sponsored austerity measures will not help us to achieve this aim.”

It is interesting that the IMF itself recently gave the indication that it would be in Ghana’s interest to secure an extension of the three-year bailout programme.

An IMF spokesperson told this paper in an email conversation that the significant challenges that had bedevilled the programme within the last year justified its extension.

“Following a significant setback in programme implementation last year, making sure that the original program objectives can be achieved will take more time than initially expected,” the spokesperson stated.

The programme achieved limited effectiveness in the light of the fact that most of the programme objectives had not been met, especially in 2016, with fiscal deficit at 10.3 per cent on commitment basis in 2016, about the same as when the negotiation fort the programme started in 2014.