The IMF Loan Limit and the Goofing of the Unpatriotic NPP

Ever since the announcement of the $3 Billion Chinese loan, the NPP instead of supporting and making sure the loan would be properly used for its intended purposes has instead spent all of its efforts to make sure the loan never see the light of day for reasons best known to them alone. As a result, and haven failed to find any meaningful plan to sabotage the loan, they were so joyous to have come across what seemed to be a credible means to advance their wicked cause that they failed to think deeply and ponder on the interpretation of the agreement they claim the government of Ghana signed with the IMF on 12th May 2011.

The agreement in question on page 17, Section D of the document, titled “Public Debt Management” states that “IN 2011, COMMERCIAL BORROWING WILL NOT EXCEED $800 MILLION.” What is shocking from the point of view of discerning Ghanaians is the fact that a political party that prides itself to have numerous so-called luminary lawyers in its membership will interpret such a statement to mean that Ghana has no right to secure any more loans from any institution, or that such a loan is binding on all commercial undertakings the government of Ghana embarks on for the rest of the year. It will do us a favour now that the brouhaha is gradually settling down to take our time to interpret the meaning of the statement “IN 2011, COMMERCIAL BORROWING WILL NOT EXCEED $800 MILLION.” The following questions along with some thoughts will do.

(1) WHEREIN LIE IN THIS STATEMENT THAT THE TOTAL COMMERCIAL LOANS BORROWED BY THE GOVERNMENT OF GHANA FROM ALL SOURCES SHOULD NOT EXCEED $ 800 MILLION? This question is necessary because the agreement was signed ONLY between the IMF and the government of Ghana. By not making clear that, say “IN 2011, GHANA’S TOTAL COMMERCIAL BORROWING FROM ALL SOURCES WILL NOT EXCEED $ 800 MILLION” both parties agree that this limitation applies only to the bilateral agreement between the government of Ghana and the IMF. The IMF cannot fault the government of Ghana for securing loans outside the confines of the IMF because per the agreement, nothing stops the government of Ghana from doing so. Any astute lawyer with a reputation to protect will tell the IMF it stands no chance of winning a breach of contract case based on this statement against the government of Ghana. No court can interpret this to mean anything other than that this agreement limits the government of Ghana to only monies from the IMF. This is why the IMF has been very careful in its reaction to this Chinese loan. Is it also not true from the above statement if the president of Ghana says he is not aware any such agreement limiting Ghana from borrowing outside the IMF exists? The NPP on the other hand are either ignorant or are trying to prey on the ignorance of the populace, many of whom have become disciples of political parties following blindly and accepting any sermon preached out by any official from their affiliated party as the gospel truth. The NPP officials and their zealot followers who have been howling insults from ‘the president is incompetent, not on top of his job, not in charge, blind, deaf’ etc. should know the clause they are alluding to is not trivial and is worth a careful understanding, at least from a legal standpoint before casting aspersions on the president.

(2) WHEREIN LIES IN THE AGREEMENT OF THE $ 3 BILLION CHINESE LOAN THAT ALL THE AMOUNT WILL BE DISBURSED IN 2011? Granted that the IMF loan limitation clause is binding on all commercial activities of the government of Ghana, this question is very necessary because what critics are effectively saying is that because of the IMF clause, the government of Ghana cannot start negotiations and legal agreements (such as parliamentary approval) on loans that are due after 2011. In any normal contractual agreement, a lot of legal and commercial agreements will have to be agreed upon and signed before the coming into effect of the actual contract. Even if a definite date in 2011 has been set aside for the start of the disbursement of the loan, it could be altered to start in 2012 or the amount due for the three months left in 2011 could be reduced such that the borrowed amount of the government of Ghana does not exceed the $800 million mark. In the world of business, a loan is not a loan until the money is seen in the borrower’s bank account. That’s when the agreement starts and the accompanied interest rate comes into effect. In essence, the NPP and their bandwagon are jumping into hasty conclusions because with just three months to the end of the year 2011, it is not likely that the Chinese loan will come into effect before the end of the year. In fact the government of Ghana has every right to prepare the ground for this loan and does no need to sit idle till the expiration of this so-called IMF loan limitation (which to my understanding limits the GoG to only IMF loans) before embarking on other equally meaningful commercial undertakings.

(3) WHEN DID THE IMF BECOME THE GOVERNMENT OF THE WORLD OR FOR THAT MATTER THE GOVERNMENT OF GHANA?

I ask this question because it is very serious for a whole country to be limited by an outside commercial entity whose sole aim is to do the bidding of its masters. I am not those fanatics who see all things IMF as evil but just that a country is poor does not mean its right to lawful and profitable commercial activities should be limited. In effect, if the IMF agreement applies to all loans contracted by the government of Ghana both from the IMF and outside the IMF, then the IMF is ruling this country by proxy and I will fault the government of Ghana for agreeing to such a clause in the first place. Such an agreement will make sense if the country is ruled by military dictators who are on many occasions accountable to no one. However, in an established democratic country like Ghana with free media and vibrant parliamentary system, such a measure is unnecessary and leads to the notion that the IMF is deliberately limiting the pace of our development for their own good.

(4) WHICH SIDE IS THE NPP SERVING, THE PEOPLE OF GHANA OR THE IMF?

I am asking this question purely from the point of view of my own motto when dealing with peoples of other nations, which is, “GHANA FIRST”. It is very disturbing the attitude of the NPP towards this Chinese loan. Not a day pass without someone from the NPP expressing how strongly opposed they are to this loan. We can play politics with everything but not when it concerns the progress and wellbeing of the nation. If it is true that as a nation we badly need such a loan, and is also true that the IMF is not in a position or is unwilling to loan Ghana such an amount, not to talk of the difference in interest rates, then the NPP are doing the ordinary Ghanaian on street a disservice. Already many people from the Western region are asking whether the NPP would have opposed such a loan if majority of the projects were concentrated in the Ashanti region. And why not ask so, for the people of the western region have been very accommodative in the use of the amount accruing from the resources taken from their land even though it is one of the least developed regions in Ghana. The strategic location of the western region together with its resources should have propelled it to equal, if not surpassed, the developmental level of Greater Accra and Ashanti, yet it is still lagging. And to add insult to it, the NPP is now opposing their wellbeing. What is more, whatever the fruit of this loan, all Ghanaians stand to benefit. The majority of the intended projects are located in the western region due to its strategic location and nothing else.

My advice to the NPP officials is that the fact that you are an opposition party does not necessary mean you should oppose everything from the opposite side. The best you can do as a credible opposition party is to be at the tail of the government ensuring that the loan is used appropriately for what it is intended for and that the nation gets good value for money and not be short-changed through any substandard work. The people from the western region are watching carefully your attitude towards this loan and will punish you dearly if by your actions the loan does not see the light of day.

By Ato Dadzie